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PPI complaints flood in

PPI complaints flood in

Category: Money

Updated: 02/08/2011
First Published: 02/08/2011

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 It is now over 6 months old so the content may be out of date.
More than 900 complaints about payment protection insurance (PPI) are flooding into the Financial Ombudsman Service (FOS) every day.

The revelation has come as the organisation said that the first three months of the new financial year have been its busiest ever quarter period.

FOS received 81,000 complaints from April to July this year – more than double the number that were made in the same period last year.

Unsurprisingly, the bulk of complaints have concerned PPI after the banks lost an appeal on a ruling to pay back the policies in the High Court earlier this year.

Figures from some of the banks this week have revealed that the PPI saga is having an adverse effect on their balance sheets.

Barclays today said that its profits had fallen by 33% compared to the first six months of last year, with a £1 billion provision for PPI claims largely to blame.

Yesterday's results from HSBC also showed the bank has put almost £270 million to one side to deal with customers' claims.

Lloyds Banking Group has also previously revealed that it has put £3.2 billion aside to pay possible claims.

PPI was sold by banks on unsecured credit products such as loans, credit cards and some mortgage products.

However, the image of the cover was tarnished because of large scale mis-selling, with customers being sold the insurance when they didn't need or want it, and at the same time as they took the credit.

FOS said that it expected the number of new PPI claims to slow as more cases are solved and finalised in the coming months.

Away from PPI, there was a further welcome decline in current account complaints, but some increase in mortgage-related complaints.

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