PPI and packaged accounts continue to dominate Ombudsman complaints
Between April and June, 43,569 people brought new PPI gripes to the Ombudsman, accounting for 53% of all new cases received over the time period. For closed cases, 57% of PPI complaints were upheld in the consumer’s favour. This represents a significant fall compared to the previous year, where two-thirds of complaints were upheld.
A further 7,319 people brought packaged account complaints to the Ombudsman between April and June, representing 7% of all new cases. Almost a quarter of these complaints were upheld, nearly double the 14% that were upheld during 2015/16.
Payday loans complaints meanwhile are snowballing, according to the latest figures. In 2015/16, the Ombudsman opened 3,168 new cases regarding short-term loans, but 2,729 were opened in the three months to June alone. If these complaints stay at current levels, 244% more cases will be opened in 2016/17, compared to the previous year.
However, more self-invested personal pension (SIPP) complaints were upheld than any other product (66%), significantly higher than the 57% of upheld complaints in the previous year.
However, new cases for this financial product only totalled 328, accounting for less than 1% of new cases.
Overall complaints figures down
Overall, 81,709 new cases were brought to the Financial Ombudsman Service between April and June. If complaints continue at this rate, the Ombudsman will open 3.7% fewer cases this year.
Less than half of settled complaints were upheld in favour of the consumer during the first quarter of this year, despite the Ombudsman upholding the majority of complaints in both 2015/16 and 2014/15.
If you’ve got a gripe with a financial services provider, complain to the company in the first instance. If you don’t get a response within eight weeks or you’re not happy with the response you do get, take it to the free Financial Ombudsman Service to look into.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
Like a self-select ISA but for pensions, self-invested personal pension is a registered pension plan that gives you a flexible and tax-efficient method of preparing for your retirement. It gives you all sorts of options on how you put money in, how you invest it and how it’s paid out and offers a greater number of investment opportunities than if the fund was managed by a pension company. SIPPs are very flexible and allow investments such as quoted and unquoted shares, investment funds, cash deposits, commercial property and intangible property (i.e. copyrights, royalties, patents or carbon offsets). Not permitted are loans to members or people or companies connected to the SIPP holder, tangible moveable property (with the exception of tradable gold) and residential property.
Short-term cash loans designed to be borrowed mid-way through the month to tide the borrower over until they next get paid, whereupon the loan is settled. Generally used by people with bad credit ratings and/or no access to short-term credit such as an overdraft or credit card. Like logbook loans, this type of borrowing is hugely expensive: the average APR on payday loans is well over 1,000% and in some instances can be considerably more.
A current account that charges a monthly fee in return for a “package” of additional services, such as travel insurance, credit card protection, mobile phone insurance, identity theft insurance, car breakdown cover or a “concierge service” that will book airline and theatre tickets or restaurant tables. However, many consumer experts say the features are overpriced and that more competitive deals exist elsewhere in the market and that very few packaged account holders actually take advantage of the features.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.