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PPI continues to dominate complaints

PPI continues to dominate complaints

Category: Banking

Updated: 04/07/2012
First Published: 04/07/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Figures released by the Financial Ombudsman service have shown that the mis-selling of payment protection insurance, PPI, is still the biggest cause of complaint.

The overall number of complaints to the dispute settling service fell between April and June, although 56% of new complaints from consumers were linked to mis-sold PPI. In total the ombudsman received and dealt with 57,790 new complaints over the three month period, much lower than the 76,522 new cases received during January and March and 22,921 less than during the same period last year.

The figures show that the majority of other complaints were regarding current account and credit card issues. Half of all complaints were found to be in the complainant's favour.

The PPI scandal relates to the mis-selling of payment protection insurance policies, by lenders, to mortgage, credit card and unsecured loan customers. The insurance covers mortgage repayments in the event of the customer falling ill or losing their job.

Thousands of people took out the insurance, despite them not actually requiring the product. Following an investigation by the Financial Services Authority (FSA), banks incurred fines and were ordered to pay out compensation to those affected by the mis-selling.

The mis-selling scandal has triggered a number of claims companies being established to help customers claim PPI compensation. Unfortunately, the ombudsman recently revealed that thousands of bogus PPI compensation claims had been received, in attempts to exploit the compensation system.

The Financial Ombudsman deals with around a million enquiries a year and handles more than 250,000 disputes.

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