Mis-sold PPI accounts for half of Financial Ombudsman’s workload, says PPI Claims company
The Financial Ombudsman has admitted that over half the cases it is called to adjudicate on are about mis-sold PPI, says PPI reclaims company Simple Financial Solutions.
Among the high street banks, Lloyds has generated the largest number of complaints about insurance – 8,378 out of a total 12,234 – of which a large number are known to concern mis sold PPI. If a customer is not satisfied with the outcome of a complaint or the lender does not respond within eight weeks, they can escalate the complaint to the Financial Ombudsman.
A spokesperson for PPI Claims company Simple Financial Solutions, said: “Much of the recent heavy workload for the FSA has come about because the British Banker’s Association brought a judicial review to challenge the FSA rules controlling the handling of mis sold Payment Protection Insurance complaints. Despite not having the permission from the FSA to do so, many banks refused to process new mis sold Payment Protection Insurance complaints until the Review was complete, which led to a flurry of PPI reclaims being submitted prior to the judicial review deadline. The result is that thousands of people who have been mis sold Payment Protection Insurance have their complaints put on hold while the banks try to use the judicial review to wriggle out of their responsibilities. The combination of new mis sold PPI cases and old stalled cases is likely to account for most of the Financial Ombudsman’s workload for some time to come.”
Due to the escalating number of claims about mis sold Payment Protection Insurance, lenders are no longer allowed to offer single premium Payment Protection Insurance on unsecured loans. However, that has done nothing to alter the perception of consumers that PPI is needed to get a loan or credit card. Which? recently reported that 13% of the UK’s 9.8 million credit card users thought accepting their lenders offer of Payment Protection Insurance was either a condition of their application or would help their chance of being successful. In addition, some lenders were still falling short of the law that governs how Payment Protection Insurance should be sold, with 28% of credit card users still not being checked by lenders for suitability.
“The outcome of the judicial review is due any day now, but it is by no means certain that mis sold ppi cases that have been held up will be finally settled once the review is behind us. I believe the bankers will do whatever they can to hold up the proceedings as long as possible, and we can probably look forward to a long drawn out appeals process if the review is not successful. The bankers do not want to see their future bonuses and pay rises in jeopardy because they’ve had to pay out mis sold PPI compensation claims. They will do whatever they can to protect their own interests with little regard to the thousands of people they’ve cheated.”
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Page Updated Last on: Jul 18, 2012