Payment protection insurance (PPI) remains the most complained-about financial product, with arbitrator the Financial Ombudsman Service receiving up to 4,000 PPI cases each week.
In the year to 31 March 2016, it received 188,712 PPI complaints in total, which equates to 56% of all new complaints made to the Ombudsman over that time frame.
However, despite 66% of PPI complaints being upheld in favour of consumers, a whopping 81.5% were made by claims management companies.
- Use Moneywise’s free PPI reclaim template letter to claim yourself.
Meanwhile, package bank account complaints – where you pay a fee for a current account usually bundled with add-on insurance products – also rose, more than doubling to 44,244.
Here, 61.5% of complaints were bought by claims management companies, although only 14% of complaints were upheld in favour of the consumer.
Claims firms typically take about 25% of any redress you’re awarded, but you can claim yourself for free – something which the Ombudsman is encouraging.
Alex Neill, Which? director of policy and campaigns, adds: “Too many people have been driven to use claims management companies (CMCs) that are taking a large proportion of the compensation they are owed.
“Banks and other providers must make the process simpler and easier for customers to claim directly, or pick up the tab when consumers use CMCs to get back the money they are owed.”
Overall complaints on the up
In the year to 31 March 2016, 1.6 million people got in touch with the Ombudsman – that’s over 5,000 each working day – to discuss financial problems, from pet insurance to portfolio management.
One in five complaints – a total of 340,899 – went on to become investigations. This compares to 329,509 the previous year.
Of the 438,802 complaints the Ombudsman resolved over this time period, just over half (51%) were upheld in the consumer’s favour.
However, other than PPI and packaged bank accounts, 82% of complaints were made by consumers rather than by claims firms.
The Ombudsman highlights that complaints involving credit, such as hire purchase and point of loan sales, increased by 40%, with payday loan complaints tripling.
Meanwhile, new complaints about personal pension plans are up by almost a quarter (23%), although annuity complaints are stable.
Can I complain to the Ombudsman?
If you’ve got a gripe with a financial firm, you need to complain to it first. If you don’t get a response within eight weeks, or you’re unhappy with the response you’ve been given, you can take your gripe to the free Financial Ombudsman Service.
See www.financial-ombudsman.org.uk for the full details on how to submit a complaint.