Over 50,000 PPI complainants to benefit
By Elliot Wright, 23rd June 2010
Mis-sold payment protection insurance (PPI) victims have been
given a boost by the city watchdog after being given extra time to
take their complaint to the Financial Ombudsman Service (FOS).
Around 55,000 people who had been mis-sold PPI but saw their initial
complaints rejected by firms between 28 November 2009 and 28 April
2009 have been given an extra five months to go to the FOS on top
of the usual six month deadline.
The complainants now have until 27 October 2010 to forward their
claims to the FOS.
The Financial Services Authority decided to extend the deadline
so their forthcoming revamp of the industry's PPI complaints system
does not affect potential mis-sold PPI complainants.
Vera Cottrell from consumer group Which? said: "The decision to
extend the time limit for referring complaints gives people more
time to reconsider their position, and ideally we would like to
have this opportunity extended to people who complained some time
ago."
The mis-selling of PPI accounted for a massive 30% of the FOS'
workload over 2009-10, making it the biggest source of unresolved
complaints in the financial services industry.
PPI is designed to protect those who take out loans, mortgages
and credit cards by covering repayments should the policyholder
suffer an unexpected drop in income, such as through illness or
redundancy.
However, thousands of the policies have been mis-sold for
various reasons including the borrower being told it was compulsory
or part of the agreement, or being misadvised about the costs.
In many cases, borrowers have been sold PPI even though they
were not eligible for the cover. For example, they were
self-employed at the time or suffered from a pre-existing medical
condition.
In September 2009, the FSA decided to crackdown on the
widespread practice of PPI mis-selling and ordered firms to reopen
complaints they had previously rejected. The regulator estimates
there could be over 500,000 such cases.
The regulator has also dished out multi-million pound fines in
the past to high-profile firms such as Alliance & Leicester,
HFC Bank and Egg.
PPI selling firms have also been told by the FSA to improve the
way they deal with complaints and a new set of industry rules may
in place by the end of this summer.
In addition, the Competition Commission has decided to press on
with its plans to ban the selling of PPI alongside personal loans,
mortgages and credit cards at the point of sale.
Claims Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010