Financial Ombudsman receives record PPI claims

Tuesday, 22 May 2012 10:02

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Six out of every 10 cases handled by the Financial Ombudsman Service in the past year were about the sale of payment protection insurance (PPI). 

PPI cases totalled 157,716 – up by 51 per cent on the previous year and the highest number of complaints ever received about a single financial product, according to the watchdog’s annual review.

Around 69 per cent of PPI complaints were brought by claims companies, down from 76 per cent last year, as more consumers realise they do not need to pay someone to complain on their behalf, the ombudsman said.

Natalie Ceeney, chief ombudsman, said: “This year has been a struggle for many consumers, who have found themselves burdened by debt, besieged by claims companies and bewildered by the complexity of financial services.

“This has made our work at the ombudsman service more challenging – but more crucial – than ever before.”

However, nearly 6,000 people put in bogus PPI compensation claims last year, the majority of which were submitted by claims companies, it has emerged.

The fake complaints made up less than four per cent of total PPI cases, but the number is four times higher than in the previous year.

“I think it is perfectly understandable for people to ask their bank – did I have PPI?,” said Ms Ceeney said.

“At the same time we are seeing consumers being very badly misled by claims management companies.”

The watchdog’s review also revealed that it had received at least 1.2 million frontline enquiries and complaints about a range of financial products and services in the past year – the equivalent of more than 5,000 per day.

One in five of the initial enquiries went on to become formal disputes, a record 264,375 new cases, up 28 per cent on the previous year.

All areas of the UK saw similar-sized increases in the number of consumers bringing complaints to the ombudsman – with “complaint hotspots” identified in Glasgow, Swansea and Bristol, the report said.

 

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