PPI complaints tail off
Tuesday 18 October 2011
Complaints made to the Financial Ombudsman Service (FOS) about payment protection insurance (PPI) have tailed off by more than half, figures showed today.
The watchdog said that it received 19,259 new consumer complaints about the issue between July and September.
This compared with 56,025 new complaints during the previous quarter, between April and June.
During the latest quarter, 92% of complaints were resolved in favour of the consumer, compared with just over half (55%) between April and June.
The fall in PPI complaints meant that in total, the FOS received 50,645 complaints generally between July and September, a sharp drop on 81,301 in the previous quarter.
The FOS said that if PPI were taken out of the equation, complaints to it about other matters had actually gone up by nearly a quarter.
Complaints about credit card accounts for example have risen to 5,751, from 5,500 in the previous quarter.
New complaints about house mortgages have also gone up significantly, up from 2,044 in the previous quarter to reach 2,796.
A spokeswoman for the FOS said there had been a "drag effect" on PPI complaints while the banking industry fought a legal battle on the issue.
But the latest figures indicated that banks were resolving matters with their customers in the first instance, rather than customers resorting to the FOS.
Asked if the PPI complaints had peaked, she said: "It is a matter of waiting to see how things pan out."
The number of complaints taken to the FOS about PPI rocketed to 104,597 in the financial year 2010/11 as massive publicity surrounding the issue alerted people to possible mis-selling of the insurance.
The previous year saw less than half the number of complaints, a total of 49,196.
The Financial Services Authority (FSA) said in August that the financial sector paid out £215 million in compensation to victims of the PPI mis-selling scandal in the first half of the year.
The banking industry dropped its legal challenge in May over whether new FSA rules on PPI mis-selling claims could be applied retrospectively.
The move meant more than three million people were in line for compensation, expected to cost firms between £7 billion and £9 billion.
The issue has been predicted to be the biggest mis-selling scandal the UK has ever seen, with final PPI compensation likely to dwarf the £4.5 billion paid to people who were wrongly sold personal pensions and the £2.7 billion paid to victims of endowment mis-selling.
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