A courtroom defeat for banks over the mis-selling of Payment Protection (PPI) Insurance resulted in a surge of new complaints, figures show.
The Financial Ombudsman Service has reported receiving an average of 900 PPI cases each working day in April, May and June. In April, the banking industry lost its High Court challenge to new rules on the sale of PPI. A month later, the British Bankers’ Association chose not to appeal.
This ended the hold on tens of thousands of fresh PPI complaints that came in to banks and the process of refunds for those mis-sold PPI moved up a gear.
Refunds
PPI is supposed to cover loan repayments if someone becomes ill or jobless, but many of the policies sold by the banks were mis-sold. Figures released by the ombudsman show that there were 56,025 new complaints about PPI in the first quarter of the financial year. This accounted for 69% of all new complaints made to the ombudsman during that period. Some 55% was resolved in favour of the consumer. Banks have now set aside millions of pounds for refunds, and are attempting to clear a backlog of complaints.
Lloyds Banking Group set aside £3.2bn to cover the cost of refunds, followed by Barclays (£1bn), RBS (£850m), Santander (£548m) and HSBC (£269m).
“It is difficult to tell whether we will be seeing still higher numbers [of complaints] yet, or whether the figures will now start to decline,” Mr Boorman said.
Next on the list were 5,500 disputes about credit card accounts, which made up just 7% of new complaints.
Sally Bowyer, Managing Director of Brunel Franklin said: “Everyone accepts that banks provide a valuable service and are entitled to make fair and reasonable charges for services. But people shouldn’t be sold PPI without being furnished with the full facts. PPI mis-selling cases serve as timely reminder of how careful we all need to be when taking out loans and other credit card agreements.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51