Banks make PPI complaints toughHalf of banks do not offer online service

25 December 2011

Half of providers only accept complaints by phone or post

Only 50% of financial providers give consumers the opportunity to lodge complaints about payment protection insurance (PPI) claims online, according to new Which? research.

Just 14 of the 28 providers we looked at were able to process applications to reclaim PPI complaints made through email, with the remainder only accepting complaints made by post or telephone.

Over £1 billion paid out

Latest figures from the Financial Services Authority (FSA) show that banks have paid out £1 billion in PPI compensation so far this year, with £268 million received by consumers in October alone.

In June, the FSA granted Barclays, Lloyds TSB and RBS extra time to deal with complaints – 16 weeks rather than the usual eight weeks – until the end of the year but of those three banks, only Lloyds accepts complaints electronically.

CMCs also failing

Most complaints are from consumers that have either had their initial PPI claim rejected by the provider, have been mis-sold a policy or are dissatisfied with the size of refund they received after paying off their loan early.

The Financial Ombudsman Service (FOS) is still being referred 3,000 PPI cases a week, 80% of which come from claims management companies (CMCs).

A recent Which? investigation into found serious failings in the industry with 66% of companies not advising callers about the FOS and many frequently suggesting that consumers stood a better chance of success by using a CMC.

FSA warning

Regulators have warned providers that they will be paying close attention to future PPI products, while banks have set aside billions to compensate PPI customers, with claims expected to keep flowing into next year.

Alliance & Leicester, Lloyds Banking Group, HSBC and Santander are among the providers that do accept online PPI complaints but Barclays, Co-op Bank, Natwest and RBS are some of the ones that don’t.

Lucy Widenka, senior advocate at Which? said: ‘Banks should remove any barriers to consumers making a complaint. The rules state that complaints should be allowed ‘by any reasonable means’, so why is it that some providers offer this by e-mail and others don't?’

More on this…

Stake your claim – guide to reclaiming your PPI if you've been mis-sold a policy
Have you been mis-sold? – find out in our guide
Contacting the ombudsman - when to escalate your complaint