| PPI claims upheld |
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Complaints about Payment Protection Insurance (PPI) have soared according to the Financial Ombudsman Service (FOS) which says 80% of the complaints are being upheld. In January nearly 1500 complaints were made about PPI compared to 1832 for the whole of the financial year 2006/07. The rate at which complaints are being upheld is a major concern for the banks and other PPI providers. For insurance complaints the figure is 32% overall with the highest category being 43% for motor insurance. PPI is widely criticised for being expensive, difficult to understand and almost impossible to claim on. The insurance is meant to cover payments on loans, mortgages and credit cards if the borrower is unable to make them because of illness, accident or unemployment. The Office of Fair Trading (OFT) has already decided there may be evidence of misspelling and the issue is currently being investigated by The Competition Commission. At the same time the Financial Services Authority is making the guidelines that PPI providers must follow, stricter. Several firms have been fined recently for inappropriate selling. The rise in the number of complaints though is of great concern to the FOS who worry that the high number of complaints upheld suggests that companies are passing complaints too quickly to the FOS rather than deal with them internally. Complaints are being rejected out of hand with customers told to look at their terms and conditions. But with 80% of claims being upheld the way firms are handling complaints suggests not enough is being done before the sale takes place and after. |
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