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PPI contributes to rise in financial complaints

PPI contributes to rise in financial complaints

Category: Banking

Updated: 28/03/2012
First Published: 28/03/2012

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 It is now over 6 months old so the content may be out of date.

Worries over payment protection insurance saw the number of complaints about financial institutions increase significantly in the second half of 2011.

Figures from the Financial Services Authority (FSA) show that the number of complaints made in the second half of the year amounted to just over 2.25 million – a 21% increase from the last six months of 2010.

The noticeable increase was caused by complaints about PPI. Complaints about general insurance and pure protection increased by 49% in the period to 1.28 million.

Within the product group the number of complaints about PPI rose by 85% to 977,510.

Banks have been forced to pay back millions of pounds to consumers who were mis-sold the loan cover, with figures showing £2.1 billion was paid in redress to PPI customers in the second half of last year.

The Financial Ombudsman Service yesterday said that it expected claims to continue to pour in.

With a deluge of claims expected in the coming year, banks have set aside billions to pay compensation to PPI customers.

By contrast, the number of banking complaints was at the lowest level since the second half of 2006 at just shy of 787,100 – a 2% fall on the previous six months and down 13% on a year ago.

And within banking, the volume of complaints made about current accounts fell by 6%, while gripes about savings and other banking products fell by 12%.

Not all areas of retail banking saw a fall in complaints, however, with the volume of objections about credit cards and loans both on the up.

Within retail banking, Barclays saw the most complaints, followed by Santander and NatWest.

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