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Ombudsman sees PPI complaints rise

Ombudsman sees PPI complaints rise

Category: Insurance

Updated: 22/05/2012
First Published: 22/05/2012

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 It is now over 6 months old so the content may be out of date.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 payment protection insurance (PPI) complaints passed over to the Financial Ombudsman shot up in the last financial year.

The Ombudsman settles disputes that cannot be resolved between customers and providers.

The service was inundated with PPI claims during the year, handling 157,716 separate cases about the insurance in total – a 51% rise on the previous financial year.

And it was claims management firms that initiated the majority of the complaints made.

The companies – which have attracted criticism for taking a cut of customers' compensation – brought forward almost seven in ten PPI cases that were settled by the Ombudsman into 2011-12.

And there are worries that making bogus claims is becoming more common.

The Ombudsman said it saw a significant rise in the number of groundless PPI claims made last year – with the overwhelming majority made by claims firms.

Some 5,661 claims were made when, in fact, no PPI policy had ever been taken out.

"The rise in the number of complaints for PPI mis-selling confirms the need for lenders to improve the way they compensate the huge numbers of people that were mis-sold this product," said Which? executive director, Richard Lloyd.

"With over £9 billion set aside for PPI redress, it's essential that barriers that prevent people getting redress are removed, and quickly."

Away from PPI, the number of insurance complaints increased by 31%, with a 10% rise in credit card cases.

Mortgage complaints were also in the ascendancy, with the service moved to rule on 35% more in 2011-12 than was the case in 2010-11.

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