BBC News, Tuesday, 5 March 2013
Read more: http://www.bbc.co.uk/news/business-21654732
The financial ombudsman service is taking on 2,000 new cases a day following payment protection insurance (PPI) complaints, with numbers rising at “unprecedented” rates.
The service received 211,885 new PPI complaints in the second half of 2012.
These made up nearly three-quarters of the 283,251 new complaints sent to the ombudsman during the six months.
The service rules on cases that remain unresolved between a customer and a financial institution.
‘No sign of slowing’
Payment protection insurance was designed to cover loan repayments for policyholders who became ill, had an accident or lost their job. Yet it was mis-sold on a massive scale to customers who did not want or need it.
Now, they are each receiving an average of nearly £3,000 in compensation, if their claim is successful. Refunding these customers has cost the UK banks a collective total of more than £15bn, following the latest provisions by the major banks.
Some claims are disputed by the banks and these often end up with the ombudsman.
Lloyds TSB Bank had the highest number of PPI cases referred to the ombudsman of any institution during the second half of the year, but the ombudsman found in the customers’ favour in 86% of the cases against the bank.
This was a higher level than all of the other major UK banks.
“The number of PPI complaints has continued to increase at unprecedented levels,” said Natalie Ceeney, chief financial ombudsman.
“As the complaint levels show no sign of slowing, consumers are increasingly having to wait longer to get their complaints sorted – with many businesses still continuing to cause unnecessary delays.
“Where businesses have shown a real commitment to better customer service and diligent complaints handling – including actively engaging with the ombudsman – cases are resolved more quickly and easily, to the benefit of everyone.”
Lloyds has said that it reviews all PPI claims in “an in-depth manner that produces fair outcomes for customers”.
The banking group said its complaints levels in general were falling.
“We are very disappointed with the number of PPI complaints that have been referred to the ombudsman service, and we are actively addressing this with the ombudsman,” said Martin Dodd, customer services director at Lloyds Banking Group.
“We are confident that we will see an improvement throughout the year.”