The Financial Ombudsman Service has announced that so far this year, it has received more than 25,000 complaints about payment protection insurance (PPI). A 10-fold increase on last year’s complaints about the insurance.
It has also received nearly 10,000 complaints about credit card charges since the beginning of January. Together the two issues have outnumbered the 30,000 complaints the ombudsman received last year relating to bank charges.
Widespread PPI complaints
A number of companies have been fined by the financial ombudsman, the City watchdog, for selling PPI to people who do not want or need it.
The Ombudsman has said the significant proportion of complaints that were being upheld, made it think there was “widespread consumer detriment”, and as a result it has written to the Financial Services Authority about the issue.
In doing so it triggered the so-called wider implications procedure, under which the FSA will consider if taking wider regulatory action is a better option than the ombudsman deciding individual cases.
How to claim mis-sold PPI charges
PPI covers repayments on loans or credit cards if the borrower is unable to pay because of loss of earnings caused by accident, illness, unemployment or death.
Which? has been speaking out about the mis-selling of PPI for many years and provides a guide to how to claim if you’ve been sold PPI and a template letter to send a complaint to your lender if you believe you’ve been mis-sold PPI.
Which? Money editor Martyn Hocking said: ‘After years of campaigning by Which? it’s good to see other organisations such as the Competition Commission, Office of Fair Trading (OFT) and the Financial Services Authority (FSA) are voicing their concerns.
‘Although the Financial Ombudsman Service was set up to deal with individual complaints it makes sense that if so many consumers are complaining about the same issue that they take this up as a collective compliant and force companies to treat their customers fairly.’
The latest research by the Competition Commission found that in 2006, of the £3.5bn of the insurance sold by 12 largest sellers, £1.4bn was ‘excess profit’ for the banks and institutions that sold the policies.
Nineteen firms have been penalised by the Financial Services Authority for mis-selling PPI, and this has led to a string of complaints by individual consumers to the Financial Ombudsman Service which can order refunds or compensation.
Mis-sold PPI claims
In November, the Competition Commission’s inquiry into the PPI market called for a ban on the sale of single premium policies. It recommended that firms would have to wait for 14 days before they were allowed to contact customers taking out credit cards or loans to sell them the cover.
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