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PPI complaints still at 10,000 per week

The Momentum UK Team 16 July 2013

The number of Payment Protection Insurance complaints still number around 2000 per day, or 10,000 per week, 78% of which are found in the customer's favour according to the Financial Ombudsman Service (FOS). 

Payment Protection Insurance (PPI) is sometimes sold alongside loans and insurance, to protect repayments in the event of illness or unemployment. However, in many cases is was sold to customers either without their knowledge, or where it was inappropriate for their needs.

The FOS is the customer’s last port of call for those who have had difficulty with a financial services institution such as a bank or building society. The independent adjudicator received a total of 132,152 new PPI claimants between April and June this year - more than the total across the entire 2010-11 financial year.

Complaints spiked in summer last year, when the number of complaints referred to the FOS doubled over just three months. As a result the FOS has been forced to triple its staffing levels, employing 1,000 new people last year and recruiting another 1,000 this year. A spokesman for the FOS said:

“It is disappointing that the number of complaints we continue to receive remains at over 10,000 a week,”

“This is particularly true given that the banks have had the opportunity to resolve each complaint before it is referred to the ombudsman.”

The FOS believes that this lack of trust has led to the sudden surge in PPI complaints. Their spokesman added:

"The tipping point for the lack of trust was Libor [the interest-rate rigging scandal] last summer. Since then we have seen a huge increase of complaints coming in and it almost seems to be non-stop."

Although a lack of trust in the banks may be driving people to complain in the first place, the fact that almost 8 out of 10 complaints referred to the FOS were upheld suggests that banks may be failing to deal with complaints correctly.

Momentum