Banks still not investigating mis sold PPI complaints properly, says FOS

Ombudsman receives record number of PPI complaints

By Elliot Wright, 23rd December 2009

The Financial Ombudsman Service (FOS) has criticized banks and other insurance sellers for failing to handle complaints about mis sold payment protection insurance (PPI) appropriately.

Despite the banking industry's assurances that the number of mis sold PPI complaints would fall to 25,000 this year, the FOS actually received a record 45,000 complaints - a massive 45% increase on the previous year.

The FOS claims that PPI - the insurance sold alongside loans and credit cards designed to cover payments in the event of unemployment or sickness - is now seen by consumers as a "faulty" product and this is reflected in the 800 complaints they receive a week.

Nine out of ten of these complaints are being upheld by the FOS after being rejected by firms, confirming suspicions that the firms are not dealing with them correctly in the first instance.

Nine out of ten of mis sold PPI complaints are being upheld by the FOS after being rejected by firms

Paul Bicknell, from the FOS, said: "PPI providers are not handling complaints as well as we'd like, which means we are handling cases that we'd hope would have been sorted out."

Common mis sold ppi complaints include the customer not being made aware of the inclusion of the policy, or being told that their application will not be successful without it. It is also estimated that up to two million policies were sold to people who would never have been able to make a claim, such as the self-employed or part-time workers.

Earlier this year, the City watchdog the Financial Services Authority said it would force banks to reinvestigate 185,000 PPI complaints that had previously been rejected.

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