PPI complaints still at high levels

Complaints about payment protection insurance (PPI) eased back from last year's record, but still remain at historically high levels, according to the Financial Ombudsman Service (FOS).

Martin Wheatley, chief executive of the Financial Conduct Authority, said firms have been ordered to reopen 2.5 million PPI complaints
Martin Wheatley, chief executive of the Financial Conduct Authority, said firms have been ordered to reopen 2.5 million PPI complaints

The FOS, set up by MPs to settle disputes between financial firms and consumers, said it took on 133,819 PPI complaints in the first half of the calendar year, compared to 193,054 over the previous six months.

But an FOS spokesman said the amount of PPI claims coming into its office remained at a "significant level".

In the 2013/14 and 2012/13 financial years PPI hit record levels, almost touching 400,000 complaints over the 12-month period. A record was achieved last year when the FOS took on 399,939 new cases.

PPI complaints still account for seven out of ten cases the FOS receives.

The FOS said: "Around 5,000 people a week are currently asking the ombudsman to look into their PPI complaint.

"This is down from the highs of 2013 when we were receiving over 12,000 a week, but still significantly more than any other financial product."

Banks and the financial services industry have so far paid out £16 billion in just over three years to compensate customers mis-sold payment protection insurance, according to City watchdog the Financial Conduct Authority last week.

PPI policies were meant to protect customers who fell ill or lost their jobs but were often sold to customers who didn't need them or would have been ineligible to claim.

The FOS's chief ombudsman Caroline Wayman said: "Responsibility for sorting out the mass mis-sale of PPI is still the major part of the ombudsman's workload."

"We're seeing more and more people turn to us in frustration where they feel their bank or insurer simply doesn't understand or really care.

"And we're hearing growing dissatisfaction from people about being processed industrially as a number rather than being listened to as an individual customer."

PPI complaints to the FOS may rise in the second half of the year after the FCA ordered financial firms to reopen 2.5 million complaints in 2012 and 2013 it said were unfairly rejected or were paid too little compensation.

FCA chief executive Martin Wheatley said: "Making sure anybody previously mis-sold PPI is treated fairly now, and paid redress where it's due, is an important step in rebuilding trust in financial institutions."

"In around two and a half million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again."

The FOS said because of the large volumes of complaints it was receiving it would take between 18 and 24 months to resolve cases it took on.

Overall the FOS said the new cases it took on over the first six months of the year fell 23% to 191,129, due to fewer PPI complaints.

But the body said non-PPI complaints lifted 3% compared to the last six months to 57,310, with banking grievances lifted by 7% and insurance cases rising by 1%.