PPI complaints still at record levels

The financial ombudsman service is taking on 2,000 new cases a day following payment protection insurance (PPI) complaints, with numbers rising at "unprecedented" rates.

The service received 211,885 new PPI complaints in the second half of 2012.

These made up nearly three-quarters of the 283,251 new complaints sent to the ombudsman during the six months.

The service rules on cases that remain unresolved between a customer and a financial institution.

Payment protection insurance was designed to cover loan repayments for policyholders who became ill, had an accident or lost their job. Yet it was miss-sold on a massive scale to customers who did not want or need it.

Now, they are each receiving an average of nearly £3,000 in compensation, if their claim is successful. Refunding these customers has cost the UK banks a collective total of more than £15bn, following the latest provisions by the major banks.

Some claims are disputed by the banks and these often end up with the ombudsman.

Lloyds TSB Bank had the highest number of PPI cases referred to the ombudsman of any institution during the second half of the year, but the ombudsman found in the customers' favour in 86% of the cases against the bank.

This was a higher level than all of the other major UK banks.

For more on this story visit the BBC News website.




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