Financial Ombudsman expects 2010 to be a record year for complaints about mis-sold PPI - By: jacksmith

Financial Ombudsman expects big increase in mis sold PPI complaints
Payment Protection Insurance (PPI) is a product sold by businesses typically alongside loans or credit cards and is designed to cover repayments in the event of sickness, unemployment and other unforeseen changes in circumstances which could impact on your ability to make repayments. Although a good product in theory, banks and financial institutions have been known to mis-sell PPI protection to consumers.
Many consumers have been mis-sold PPI protection under the mistaken belief that it will increase their chances of having a credit card or loan application approved. Additionally, businesses have knowingly sold the PPI insurance to people who would never be eligible to make a claim, for example the self-employed, unemployed or retired. This goes drastically against the FSA regulations and constitutes mis-selling. As a result of this mis-selling the FSA have fined many businesses, one example being Alliance and Leicester incurring a £7 million penalty.
The Financial Services Authority (FSA) ordered some 185,000 previously rejected PPI insurance claims to be reopened by lenders. This came as part of their plan to make sure PPI insurance complaints were “handled properly and redressed fairly.” The FSA took this action because lenders have been rejecting around 60% PPI protection complaints. Out of this 60%, just 16% of people took their claims to the Financial Ombudsman Service. However 80% of these claims are then overturned by the FOS in the consumers favour. The FSA estimates that this will result in up to £195 million being paid in compensation to consumers.
Additionally, the Financial Ombudsman Service has recently announced that they anticipate a record 210,000 complaints from customers who are unhappy with their treatment by financial firms. This is a tremendous increase from the 165,000 complaints that the Financial Ombudsman Service expect to reach by the end of this year despite the FOS only anticipating 150,000. This extra 11% is illustrative of the increasing number of PPI insurance complaints. In the current financial year, it is estimated that there will be 42,700 claims made (even though there was a figure of just 25,000 in the budget). Furthermore the Financial Ombudsman Service has forecasted 46,000 PPI claims for the 2010/11 financial year. This is demonstrative of the wide scope of PPI mis-selling.
We at the PPI Claimline would hope that you choose us as your claims management company for PPI advice. We have no hidden agenda. We are entirely independent. We only have your best interests at heart, and we only make money if you do. We are led by people with wide experience in legal proceedings. We will always deal with our clients like friends, but approach lenders in a firm and unyielding way. Most importantly, we’re always happy to talk to you.

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