Consumers have stepped up their efforts to complain about mis-sold PPI (payment protection insurance), which overwhelmingly remains the most complained about financial product.
New figures published by the Financial Ombudsman Service show that 50,639 new PPI cases were lodged with it between July and September this year - an increase from 42,401 complaints made about PPI between April and June.
In contrast, the next most complained about product over the same period was current accounts, which involved 4,497 complaints.
The rise in PPI complaints may be explained by the Financial Conduct Authority’s (FCA) campaign launched in August featuring a likeness of Hollywood star, Arnold Schwarzenegger, which urges consumers to make a claim against mis-sold PPI before the 29 August 2019 deadline.
The City watchdog estimates that the total amount paid out to consumers for financial complaints was £1.99 billion in the first half of 2017, 82% of which went to PPI claimants.
However, less than half (40%) of PPI complaints lodged with the Financial Ombudsman since April have been successful.
This low uphold, rate could be explained by the fact that only 3.8% of PPI complaints are referred to the Financial Ombudsman for arbitration. This is a much lower than other products, such as packaged bank accounts, that see up to 66% of complaints going to the Ombudsman. This would suggest that companies are now much better prepared to handle PPI complaints satisfactorily without having to refer gripes to the Financial Ombudsman for third party judgement.
The Financial Ombudsman estimates that one third of the 1.5 million PPI complaints it has ever received were ultimately resolved independently by the consumer.
Caroline Wayman, chief ombudsman comments: “We’re already two months into the FCA’s PPI awareness campaign – which has kicked off a two-year deadline for making a PPI complaint. If you’ve seen the ad, you’ll probably agree that it’s memorable.
“With the FCA’s deadline now in place, it’s more important than ever that we [The Financial Ombudsman] and financial businesses redouble efforts to make it straightforward for people to raise their concerns directly.”
Seven in 10 payday loan complaints upheld in consumers’ favour
When it comes to other complained about financial products, behind PPI and current accounts came payday loans with 6,501 new complaints taken to the Ombudsman.
This somewhat controversial product had the largest proportion of complaints upheld against it at 64%.
Next most-complained about was packaged bank accounts, but here, only 11% of complaints were upheld.
See the table below for the top 10 most complained about financial products between April and September 2017:
Complaints made to the Financial Ombudsman April - September 2017
New direct complaints to Ombudsman
Cases referred to Ombudsman for final decision
Percentage of complaints upheld
Payment protection insurance
Packaged bank accounts
Car and motorcycle insurance
Credit card accounts
Overdrafts and loans
Source: The Financial Ombudsman, October 2017.