6th January 2015
It will take years before the payment protection insurance (PPI) mis-selling scandal is over, the Financial Ombudsman Service (FOS) has warned.
Unveiling the plan and budget for the year ahead, the FOS said that complaints against banks and other companies that mis-sold PPI are still coming in at a rate of 4,000 a week
Banks are estimated to have set aside £27 billion in compensation so far and the FOS has dealt with 1.25 million complaints about PPI. The figure does not include the number of people who complained directly to their bank and had their case resolved without FOS intervention.
In 2012, when the scandal was at its peak, there were 12,000 PPI complaints per week to the FOS.
Caroline Wayman, chief ombudsman, said: “Over the last few years the ombudsman’s workload has increased substantially – and the volatility of complaint levels remains a significant challenge when planning for the future. But we’re finally seeing evidence that the number of complaints referred to us by consumers is starting to stabilise.
“On the other hand, complaints about PPI are still the main driver of financial disputes. And although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over. Our plans take into account the increasingly hard-fought and complex nature of the cases we are seeing – not only in PPI but also in areas like mortgages and pensions. ”
She added: “No two financial complaints are alike. So from payday loans to pension drawdowns, our principal focus this year continues to be on placing fairness at the heart of what we do. Giving people honest, thoughtful answers that help them better understand and make sense of things that have gone wrong.”
The FOS plan and budget revealed that the ombudsman is expecting to answer 1.4 million consumer enquiries; resolve a further 250,000 disputes involving mis-sold payment protection insurance (PPI) – reducing the number of existing PPI cases from around 280,000 to 180,000; tackle 88,000 banking complaints, 33,000 insurance cases and 17,000 investment complaints; and recruit an additional 200 adjudicators and ombudsmen.
The proposals to manage and fund this workload include: