Gladstone Brookes | FOS still getting more than 3,600 new PPI complaints a week

FOS still getting more than 3,600 new PPI complaints a week

FOS still getting more than 3,600 new PPI complaints a week

The Financial Ombudsman Service (FOS) is still receiving more than 3,600 new PPI complaints every week, according to figures released today.

But they are just the claims appealed by consumers after being rejected by the banks.  Many thousands more are successful and are paid out each week.

Growing

Total PPI compensation paid out since January 2011 has reached £20.5 billion and has been growing at the rate of more than £⅓ billion a month for the past year.

The banks have already set aside a further £7 billion to pay anticipated future successful claims, but that figure will probably increase further.  On the day it increased its PPI provision by £1.4 billion, Lloyds Banking Group (LGB) went on record to say that if the level of complaints doesn’t fall by the anticipated amount by the end of the year they expect to have to add a further  £1 billion at the end of the year, with a possible £2 billion in 2016.

Complaints

Lloyds is the most complained about bank to FOS, with Barclays in second place.  Of 173,994 total complaints received by the service, PPI accounts for 94,091 or 55%.

There has been a massive surge of 45% in complaints about packaged bank accounts. Up to 1,000 claims a week has made them the second most complained of product after PPI.

Unfairly rejected

The average uphold rate for PPI complaints – where FOS decided the claim had been unfairly rejected – was 76% in the first six months of the year compared to 57% for all complaints.

Individually, Lloyds topped the table with 93% of all rejections being overturned.  The figure for Royal Bank Of Scotland (RBS) was 82% with Barclays only slightly behind on 81%. HSBC was the only one of the big four banks returning below average figures with a 66% turnover rate.

Challenge

Commenting on the figures, Chief Ombudsman, Caroline Wayman, said: “It’s been seven years since the Ombudsman first began to publish data about individual businesses.  This has coincided with a period of volatility and challenge for much of the financial services sector.

“Complaints about PPI continue to make up over half of our workload and, though the number of new cases has reduced in the first half of this year, the decline has not been as steady or as marked as generally expected.”

Referring to the dramatic increase in the number of packaged bank account complaints she said: “Nobody wants another PPI.  This is why we are working closely with businesses, claims companies and other regulators to make sure PPI is sorted as fairly and quickly as possible for everyone involved and that lessons are learned to prevent anything like this happening again.”

Investigation

The UK’s financial regulator – the Financial Conduct Authority (FCA) – is in the last stages of a major investigation into how PPI claims have been investigated over the years.

The probe was started after concern was expressed about the number of previously rejected claims being upheld after they were appealed to FOS.  The regulator has already ordered banks to re-open 2.5 million previous claims where there was reason to believe they were either wrongly rejected or the consumer didn’t receive the full amount of compensation due to them.

Deadline

The FCA are expected to reveal their findings next month along with a decision on a possible deadline for future PPI complaints.  The idea of a deadline has been around for a number of years, but was shelved by the former Financial Services Authority (FSA) after heated opposition by consumer groups.

The idea was resurrected at the start of 2015 and is under active consideration by the FCA, but there is still very vocal opposition to the principle of time-barring complaints.  Martin Lewis of moneysavingexpert.com and Richard Lloyd of Which? have written an open letter with a last ditch plea to prevent the deadline being allowed.

Serious concern

In their letter they said: “We write to express our serious concern that the FCA is considering the introduction of a time bar on PPI complaints.  We believe this would be to the detriment of consumers and provide the banks with an undeserved resolution to an issue that is entirely of their own making.

“While some banks have taken positive steps to deal with PPI claims and quickly resolve issues for their customers, there are two banks in particular that have high uphold rates for PPI complaints escalated to the Ombudsman and they have set aside substantial extra provisions for PPI mis-selling.

Worst

“This suggests they are far from finished dealing with the issue.  A time bar would therefore disproportionately benefit those banks that have been worst at resolving this problem.

“Instead of consulting on a time bar, we urge you to redouble you efforts to ensure that all banks are handling complaints quickly and properly and to make sure that consumers are given the compensation they are rightly due.”

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