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Bank failings revealed by Financial Ombudsman

Vast majority of PPI complaints are upheld

The vast majority of PPI complaints are upheld in favour of consumers 

The Financial Ombudsman Service (FOS) expects to receive 165,000 PPI complaints in the next financial year, with the vast majority currently being upheld in the consumer’s favour. 

Publishing its complaints data, the FOS revealed that nearly half of the 100,000 complaints it received in the past six months related to payment protection insurance (PPI), while Barclays was declared as the most complained about bank in the UK.

Latest figures on PPI

Between 1 July and 31 December 2011, the FOS received 106,193 new complaints. Of these, 46,700 related to PPI – a decrease of 53% on the 98,632  received in the first half of 2011. 

The lull reflects the impact of special arrangements allowing banks more time to deal with a backlogs of cases following their unsuccessful legal challenge on PPI complaint handling. The ombudsman service expects to receive a record 165,000 PPI complaints in 2012/2013.

Five financial services groups had more than 6,000 complaints each referred to the ombudsman service. Barclays had 11,524 new cases, Lloyds TSB 7, 467, Bank of Scotland 6,082 and Santander 5,439.  

High settlement rates on complaints

In the second half of 2011 the ombudsman service upheld an average of 72% of complaints in favour of consumers. For PPI cases specifically, uphold rates ranged between 6% and 100%. 

The big banks recorded high numbers of cases resolved in their customers’ favour. For LloydsTSB it was 87%, NatWest 85%, Barclays Bank 84% and HSBC 80%.

Which? wants a stronger regulator – our Watchdog not Lapdog campaign

Commenting on these figures, Which? chief executive, Peter Vicary-Smith, said: ‘Today’s data from the Financial Ombudsman Service is further evidence that some banks are systematically failing to treat their customers fairly when things go wrong. 

It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the ombudsman, where the overwhelming majority of complaints are then upheld.

‘This is exactly why we need the Financial Services Bill to create a strong, open and proactive watchdog which not only makes sure that people get proper redress when products are mis-sold, but that would ban dodgy financial products before they cause problems. 

‘In the meantime, the FSA must take enforcement action against any banks which continue to drag their feet on settling complaints.’

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