Financial Ombudsman Service upholds nine out of ten PPI claims, with refund payments averaging £2,750.
Hundreds of thousands of people have won refunds for mis-sold Payment Protection Insurance (PPI), with banks paying out £557m in the first six months of the year alone, according to figures.
The Financial Ombudsman Service (FOS), which rules on complaints about the controversial insurance, has seen the number of cases it has become involved with climb to more than 3,000 a week in the last two months. It has upheld nine out of 10 PPI cases in favour of consumers, with refunds averaging £2,750. Payouts vary from £200 to more than £10,000.
The number of complaints has been so high that the FOS may have to take on more staff.
In total 532,000 people made a complaint about PPI in the first half of the financial year. The insurance, designed to provide cover in case of illness or redundancy, was sold alongside financial products, often without customers’ knowledge, and rarely paid out.
The banks were told by the Financial Services Authority in May to speed up refunds after they abandoned a court challenge that had stalled claims. The banks dealt with the bulk of the 200,000 claim backlog by the end of August, the deadline set by the FSA, paying out £230m in refunds that month alone. According to FSA rules, complaints should be dealt with within eight weeks, although this does not include making a refund payment.
The FOS has 300 adjudicators working on PPI claims exclusively, but is recruiting more people. The big high street banks were expected to hire up to 6,000 workers to handle PPI complaints, with Lloyds bringing in 500 extra staff in May. Some 80% of the complaints received by the FOS were brought by claims management companies like Brunel Franklin.
Rising refunds for mis -sold PPI could prove a boon not just for consumers but the economy as a whole, by boosting consumer spending.
Sally Bowyer, Managing Director of Brunel Franklin, stressed that vendors had a responsibility to ensure their products were appropriate for individual customers before completing the transaction. “Unfortunately, the mis-sale of PPI policies is by no means unusual. Customers may well wish to protect their loan repayments, but all too often they have been sold products that were completely unsuitable for their needs.”
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.