Consumers who were mis-sold will now have longer to complain to the Financial Ombudsman Service if their bank refuses to refund their money.
Up until last week, consumers who had unsuccessfully complained about their purchase of a payment protection insurance (PPI) policy would need to refer this to the Ombudsman within six months – but the Financial Services Authority (FSA) has announced a temporary change in the rules.
Consumers who received ‘final response letters’ from providers rejecting their PPI complaints between 28 November 2009 and 28 April 2010 will have an extra five months to take their cases to the Financial Ombudsman Service. The extension is set to end on 27 October 2010.
The FSA says the temporary rule change has been introduced to ensure that consumers who have recently complained about PPI don’t run out of time while trying to achieve a resolution.
The regulator is currently working to find a long-term solution to the problems in the PPI market, and make sure consumers are treated consistently and fairly when purchasing, or complaining about, payment protection insurance.
PPI is a form of insurance that is designed to protect repayments on credit cards, loans and mortgages in the event a borrower loses their job or is unable to work. However, it has been strongly criticised by consumer groups including Which? because of its high cost, and due to the mis-selling of policies to consumers for whom the cover is unsuitable.
Some consumers who did not need, did not want or would not be covered by payment protection insurance in the event they tried to claim have been sold PPI by lenders – in some cases, without even realising it.
Which? principal policy advisor Vera Cottrell said: ‘Of the two million people we reckon have been missold PPI, only a minority ever complain. It’s outrageous that so many consumers are still waiting for fair redress, and we hope that this decision encourages more of them to persist. Our advice to people is: don’t let your bank fob you off.’
If you think you’ve been the victim of PPI mis-selling, be sure to check out the Which? . It features a that explains how to work out whether you can make a claim, plus a free that has already helped many consumers get thousands of pounds back from PPI providers.
For more information on the ‘six month rule’ that normally applies to PPI complaints, visit the Financial Ombudsman Service website.
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