PPI Upset Persists as FOS Complaints Reach Record Levels

The Financial Ombudsman Service (FOS) has described a rise in complaints relating to Payment Protection Insurance (PPI) as ‘unprecedented’. But what do the latest figures from the FOS tell us about the PPI scandal?

This week the FOS revealed that PPI complaints have now reached record levels, as 211,885 new complaints were recorded by the independent body during the second half of 2012, an increase of 147% in comparison to the first half of the year. During the same period, between 1st July 2012 and 31st December 2012, the FOS dealt with an average of 2,000 complaints on a daily basis.

While the latest statistics may seem to suggest that many more customers are actively seeking redress from their lender, there is also the concern that banks are failing to resolve customer complaints in the first stages of a claim, resulting in an excessive number of complaints being referred to the FOS.

For Lloyds Banking Group, more than 40,000 PPI complaints to the FOS were logged against them during the second half of 2012. Black Horse, part of the same group saw 97% of complaints against them upheld by the FOS in favour of the customer. And they are not alone; other major banks within the group including Bank of Scotland and Lloyds TSB saw similar results as the FOS upheld more than 80% of complaints against them in favour of the customer.

While the FOS is appointed to resolve complaints which have failed to be settled by a creditor, it is important that the banks make every effort to resolve their claims to their best ability, before they are referred to the FOS. The FOS is under building pressure to deal with the mounting number of PPI complaints left unresolved by UK banks, and this year announced the recruitment of 1,000 additional employees to cope with demand.

Aside from the implications of unresolved complaints on the FOS, many customers who are owed compensation by their lender are being forced to endure a drawn-out and frustrating claims process as banks appear to reject claims unnecessarily, to be successively overturned by the FOS. A claim which is referred to the FOS can take between 3 and 12 months to be settled, in some cases longer, resulting in a prolonged claims process for the customer and needless costs for the banks.

As a Claims Management Company specialising in claiming back mis-sold PPI on behalf of customers we hope that the figures released by the FOS will encourage banks to improve the claims process and enable customers to reclaim what is rightfully theirs with ease and efficiency.