PPI complaints start to subside

28 February 2012

Complaints to the Financial Ombudsman Service (FOS) sharply declined in the second half of 2011 as banks improved their handling of payment protection insurance (PPI) mis-selling cases.

The FOS received 106,193 new complaints in the last six months of the year - down 149,925 from the previous six months.

The majority of complaints at the start of the year were related to the mis-selling of PPI and this remained one of the main issues for the FOS throughout 2011.

In April last year, banks were ordered to start working through a huge backlog of PPI complaints by the Financial Services Authority (FSA).

The FOS says because banks were then given more time to deal with these cases fewer consumers had to resort to complaining. There was a 53% drop in complaints about PPI between 1 July and 31 December and a rise of 25% in the number of complaints upheld in favour of consumers.

Banks failing customers

Peter Vicary-Smith, chief executive of Which?, says: "Today's data from the FOS is further evidence that some banks are systematically failing to treat their customers fairly when things go wrong. It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the Ombudsman, where the overwhelming majority of complaints are then upheld."

Mortgage complaints increased by 38% in the second half of the year, while investment-related complaints rose by 5% in the same period.

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