The number of complaints about payment protection insurance (PPI) has sharply accelerated, with around 12,000 new cases being referred to an ombudsman each week between October and December.
The Financial Ombudsman Service received 145,546 complaints about PPI during the last three months of 2012. This represented 80% of all new complaints.
The massive caseload was more than double the amount of complaints received in the previous quarter.
The big uptick in PPI cases caused the total number of complaints in the three months to rise to 180,679, which means the ombudsman received more cases in that one quarter than in any single year between 2000 and 2010.
Credit cards were the second-most complained about product, accounting for 3.5% of complaints, while current accounts were the third-most complained about.
Steady rise in complaints
The number of complaints regarding PPI has been steadily rising for some time. Between April and June last year just 32,000 cases were referred to the FOS.
PPI was sold alongside loans and credit cards to cover repayments if the policyholder fell ill or lost their job. But in many cases the insurance was mis-sold and the policy would not have been suitable to claim against.
Complaints are referred to the ombudsman, which is an independent body set up by the government, when the customer is unhappy with how the financial firm has dealt with their original grievance.
Due to the huge number of PPI cases received, customers must fill in a separate PPI questionnaire in addition to the FOS’s standard complaint form.
This article was written for our sister publication Money Observer