PPI Complaints Set to Rise Again
According to the Financial Ombudsman Service (FOS), after last year’s record high, PPI complaints have taken a slight tumble. Despite this though, the number of complaints still remains at historically high levels.
In the first six months of this year, the FOS has said that it took 133,819 complaints about PPI, which is slightly less than the 193,054 that they took in the previous six months. Despite the slight drop, the complaints are, according to a FOS spokesperson, still at a “significant level”.
According to the FOS, PPI complaints still account for around 70% of the cases that they receive. There are still around 5,000 people a week asking the ombudsman service to look into their PPI complaints.
This number however is down from the significant highs of 2013 when there was over 12,000 complaints being received by the FOS each and every week. The 5,000 number is still significantly higher than complaints being received about any other financial product.
During the last two years, PPI has hit record levels and in 2014 the FOS has so far taken on almost 400,000 new cases.
The FOS was originally formed by MPs to settle disputes between financial firms and consumers which is why, when a bank rejects a PPI complaint, it should then be escalated to the Financial Ombudsman Service.
However, only around 1 in 10 get escalated to the FOS. This is mainly because when the banks reject an individual’s complaint, the consumer generally thinks that they must not be owed any money.
The Financial Conduct Authority (FCA) have said that since 2011, the banks have only paid out £16bn to their customers in compensation.
PPI policies were originally meant to cover those who customers who cannot work due to ill-health or unemployment but more often than not, these have been sold to customers who don’t even qualify.
There have been around 34 million PPI policies sold since 2001 and since 2007 there have been over 13 million complaints made to firms.
Set for an Increase
It’s more than likely that the amount of complaints will rise this year as the FCA recently ordered financial firms to reopen 2.5 million complaints from 2012 and 2013.
The reason behind the sheer amount of cases being reopened is because the FCA noticed that there was a very sudden dip in the number of complaints being upheld and leading to compensation. According to the latest figures, there was £390m paid out in June which now takes the total paid back to consumers to £16 billion.