An insurance industry watchdog has said it expects wrongly sold PPI to dominate its caseload for the next few years.
Millions of UK consumers may have been wrongly sold PPI – payment protection insurance – in the past. And now the Financial Ombudsman Service, which aims to resolve disputes between financial services providers like banks and insurance companies and their customers, says that wrongly sold PPI cases will continue a dramatic increase in the number of complaints it hears.
Most Complaints About Wrongly Sold PPI
The ombudsman announced that the year ending March 2011 was its busiest ever. It heard more than one million complaints – and more than half of them were about wrongly sold PPI.
More than 200,000 complaints overall turned into formal disputes between customers and financial companies – and the number of formal complaints about wrongly sold PPI doubled since the previous year to 104,597.
Half the people who complained were paid compensation as a result of the ombudsman’s involvement. Three-quarters of complaints involved just ten companies, and four of the UK’s biggest financial services companies accounted for more than half the ombudsman’s workload over the year.
Wrongly Sold PPI Hits Service Levels
The ombudsman said that the 110 per cent increase in wrongly sold PPI complaints was largely responsible for what it called “a regrettable reduction in its service levels”.
The sheer volume of people complaining they were wrongly sold PPI meant that the ombudsman could not process cases as quickly as it normally would.
The ombudsman also said that as well as a record numbers of complaints about wrongly sold PPI, it also faced, in a High Court case about wrongly sold PPI, “a growing numbers of cases where the banks behind the challenge have decided not to co-operate fully with us”.
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