Complaints to the Financial Ombudsman Service (FOS) about British banks are pouring in at a rate of more than 800 a day, mainly due to mis-sold Payment Protection Insurance (PPI).
Figures from the FOS, which acts to resolve complaints if customers are not satisfied with the response from their bank, showed that it received almost 150,000 new complaints in the six months to June – 54pc more than in the preceding period. The Ombudsman only deals with complaints if they are not resolved by financial institutions and their customers, meaning that they represent a fraction of total bank criticism.
Complaints about PPI – a type of insurance sold with loans and credit cards that are supposed to kick in if borrowers are unable to make repayments – accounted for almost two-thirds of the total.
Rise in complaints direct to banks
PPI complaints were put on hold while banks fought and lost a legal battle over whether they had to refund customers who had been sold PPI inappropriately. The case ended in April, and banks were given a deadline of August 31 to clear their complaints backlog, which is one reason for the rising number of cases. Britain’s biggest banks have had to refund millions of pounds to borrowers who were mis-sold PPI.
NatWest, which is owned by RBS, reported a sharp rise in complaints in the first half of this year, receiving 147,109 grievances, up from 84,109 from the previous year. Complaints at RBS in the first six months of 2011 rose to 68,414, a rise of 79pc compared with the same period in 2010. PPI accounted for 31pc and 47pc of all complaints at NatWest and RBS respectively.
Patience required
Due to the massive increases in PPI miss-selling claims being submitted to the banks, it is important to be patient when waiting for a response and not to expect any refunds to be paid quickly. If you have only just got around to submitting a claim you may well be waiting until after Christmas for a response.
Sally Bowyer, Managing Director of leading claims firm, BrunelFranklin.com said: “We continue to see a huge increase in PPI refund applications as public awareness gradually rises. Cases of mis-selling are still coming to light; as people feel the financial squeeze and learn of the PPI refund successes of friends, family and colleagues, the upward trend in the number of people seeking refunds is likely to continue for the foreseeable future.”
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.