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Financial complaints slow after PPI extension

Financial complaints slow after PPI extension

Category: Banking

Updated: 14/12/2012
First Published: 28/02/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The number of complaints made to the financial ombudsman slowed in the second half of 2011 after financial firms were given more time to resolve grievances made about payment protection insurance (PPI).

Banks, building societies and other PPI providers were granted an extension over the length of time they have to deal with their backlogs of cases following last year's unsuccessful legal challenge on PPI complaint handling.

As a result, the volume of PPI complaints received by the Financial Ombudsman Service (FOS) during the second half of 2011 fell to 46,700, a decrease of 53% on the 98,632 PPI cases received in the first half of the year.

This, in turn, saw a drop in the overall number of complaints received by the service to 106,193, down from 149,925 cases during the first six months of the year.

The figures revealed that FOS upheld an average of 72% of complaints in favour of consumers in the second half of 2011, compared to 47% in the first half, an increase which the service said reflected the impact of PPI cases.

Looking ahead, FOS is expecting to receive a record 165,000 PPI complaints in 2012/2013.

Elsewhere amongst the data it was revealed that complaints about mortgages had increased by 38% compared with the first half of the year, while investment-related complaints remained relatively stable, increasing by only 5%.

Lloyds Banking Group was the most complained about banking group during the period, attracting a total of 20,310 grievances.

Barclays (12,273), Royal Bank of Scotland (6,553), Santander (6,202) and HSBC (6,190) completed the top five of offenders.

Peter Vicary-Smith, chief executive of Which?, said the figures were further evidence that some banks systematically fail to treat their customers fairly when things go wrong.

"It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the ombudsman, where the overwhelming majority of complaints are then upheld," he added.

"This is exactly why we need the Financial Services Bill to create a strong, open and proactive watchdog which not only makes sure that people get proper redress when products are mis-sold, but that would ban dodgy financial products before they cause problems.

"In the meantime, the Financial Services Authority must take enforcement action against any banks which continue to drag their feet on settling complaints."

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