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PPI Scandal Forces Financial Body to Employ 1,000 More Staff
The Mis-Sold Payment Protection Insurance scandal has forced the Financial Ombudsman Service (FOS) to employ a staggering 1,000 more staff just to deal with the surge in complaints.
The FOS has predicted that it will be forced to deal with an unprecedented amount of PPI cases in the 2013-14 financial year. An estimated 245,000 complaints about banks and lenders will be directed towards the financial body. This represents a 45% rise in workload.
Payment Protection Insurance Compensation is set to represent two-thirds of the FOS’s workload during the upcoming financial year. The mis-selling of PPI has been described as the biggest financial scandal that the UK has ever faced.
Many of the complaints that are made to the FOS stem from cases unfairly reject by banks and lenders. Many people who believe that they are entitled to PPI Compensation, make their complaint directly to the bank or lender that they dealt with. Predictably, these banks and lenders often unfairly reject the claims as they do not want to make refunded payments.
Tony Boorman, deputy chief ombudsman revealed: "While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience. All of the UK's High Street banks have committed publicly to ensuring a decisive end to any bad practices which resulted in mis-selling
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"Two years after the court ruling confirmed the approach that financial businesses should take when handling PPI complaints, it is disappointing that we're still seeing significant numbers of unresolved disputes about mis-sold policies being referred to the ombudsman."
Consumer watchdog Which? echoed these sentiments: "The banks must deal with complaints fairly and help consumers claim back the compensation they are due without hassle.
"The rise in complaints to the financial ombudsman shows that some banks are still not making it as straightforward as they should for people to get back the money they are rightly owed."
British banks have rejected these claims despite overwhelming evidence. A spokesperson for the British Bankers’ Association reported: "Banks are committed to handling PPI complaints as efficiently as possible and have staffed-up to manage the complaints process. Given the high levels of complaints being made and the backlogs that the ombudsman is experiencing, we recognise the need to resource it appropriately.
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"All of the UK's High Street banks have committed publicly to ensuring a decisive end to any bad practices which resulted in mis-selling. Banks are overhauling their incentive structures for frontline staff, rewarding staff for high levels of customer service and not sales volumes."