The Financial Ombudsman Service (FOS) has flatly contradicted Britain’s banks’ assessment of a slow down in the level of PPI complaints by claiming numbers are continuing to rise at ‘unprecedented’ rates.
The true level of complaints across the financial sector is much higher because FOS only deal with claims the banks have already rejected. There are many more complaints where the banks have accepted liability and paid compensation already.
FOS are now handling 2,000 complaints a day – up from 1,100 a day less than a year ago – and the service has named Lloyds TSB as the bank with the highest number of complaints referred against them of which FOS upheld 86% in the clients’ favour in the second half of 2012.
Chief financial ombudsman Natalie Ceeney said: “The number of PPI complaints has continued to increase at unprecedented levels. As the complaint levels show no sign of slowing consumers are increasingly having to wait longer to get their complaints sorted with many businesses still continuing to cause unnecessary delays.
“Where businesses have shown a real commitment to better customer service and diligent complaints handling – including actively engaging with the ombudsman – cases are resolved more quickly and easily, to the benefit of everyone.”
Lloyds TSB was recently fined £4.3 million for delaying the payment of compensation to 140,000 consumers who had already won their cases for the mis-selling of PPI and have added £1.5 billion to their contingency fund for paying out successful claims. This takes their overall provision to £6.8 billion – almost half the total set aside by all the banks.
The bank claim it reviews all PPI claims in ‘an in-depth manner that produces fair outcomes for customers’ and that its complaint levels in general are falling.
Lloyds Banking Group customer services director Martin Dodd said: “We are very disappointed with the number of PPI complaints that have been referred to the ombudsman service and we are actively addressing this with the ombudsman. We are confident we will see an improvement throughout the year.”
FOS received almost 212,000 complaints about PPI in the second half of 2012 which made up nearly three quarters of the total number of complaints referred to the service. The average payout on a claim has risen from £2,700 to £3,000 and has so far cost the UK’s banks over £15 billion with more predicted to come.
In separate figures Lloyds Banking group – which comprises Lloyds TSB, Halifax and Bank Of Scotland – have revealed it has received almost 1.4 million PPI complaints in 2012. However, it claimed that figures for the second half of the year were 9% lower than the first half.
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Experts have claimed that many people who have been mis-sold payment protection insurance are either not aware they have it or are unsure whether it was of any use to them.
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