Complaints relating to payment protection insurance (PPI) are not being dealt with by some banks as quickly as they should be, according to the Financial Ombudsman Service (FOS).
New rules surrounding how complaints regarding the mis-selling of PPI should be treated are due to be challenged in the High Court by the British Bankers' Association (BBA) at the end of January.
In the meantime, the ombudsman says that some banks are stalling when it comes to dealing with PPI complaints, in case the BBA challenge is successful.
Controversy has long dogged the sale of PPI, which covers repayments on credit products if the borrower is unable to make repayments due to accident, sickness, unemployment or, in many cases, death.
Banks have up to eight weeks in which to respond to customers' complaints, but the ombudsman service says some have decided that they will not give an answer until the court case is resolved.
At the time the BBA launched its legal challenge, the FOS said it would continue to deal with PPI complaints, while awaiting the outcome of the court case.
Having continued to receive and process new PPI cases, the ombudsman is now being referred up to 2,500 cases each week.
Due to the rising volumes of cases it is having to deal with, the FOS admitted that further delays were now likely to occur at its end of the process.
"Many businesses are continuing to handle complaints as normal but some have decided that they will not respond substantively to many PPI complaints until the final legal outcome is known," said the FOS.
"The consumers in these cases can still bring their complaints to us – but only once they have first given the business eight weeks (the time the business has to sort out complaints under the FSA's 'DISP' complaints rules).
"The increase in PPI cases referred to us by consumers, where the businesses involved have not set out their conclusions on the complaints by the end of that eight-week period, means the rate at which we can settle these cases is now slowing down.
"Where businesses do not set out clear views on cases, it will be difficult for our adjudicators to resolve cases informally. Inevitably this can only result in further delays and additional costs."
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