The number of complaints about Payment Protection Insurance rose by 10% in the final three months of 2011 to 55,907, according to the Financial Ombudsman Service.
But the FOS said just under seven out of 10 (68%) of PPI complaints cases were settled in the consumer’s favour in the period, compared with more than nine out of 10 (92%) between July and September. The typical refund is £2,750, but the figure can “vary considerably” and run into tens of thousands of pounds in some cases, the ombudsman said.
The FOS pointed out that the previous spike of 92 % of complaints going the consumer’s way came shortly after a legal challenge to PPI complaints was dropped. The figure includes cases in which businesses have decided to settle in the consumer’s favour once FOS proceedings have started, as well as complaints that the FOS has upheld itself.
In December it emerged that more than £1bn was paid in the first 10 months of last year to customers complaining that they had been mis-sold PPI. The refund was paid by 16 unnamed firms, accounting for 92% of PPI complaints in the first half of 2011.
Consumers took out PPI to help repay their loans if they fell ill for a long period or became unemployed, but a widespread mis-selling scandal emerged.
Some customers found they had taken out the policy without realising they did not have to have it or felt pressured into doing so. The banking industry dropped its legal challenge in May over whether new rules on PPI mis-selling claims could be applied retrospectively.
The move meant more than three million people were in line for refunds, expected to result in an overall bill of between £7bn and £9bn. The FOS said feedback suggests it will continue to receive “substantial” volumes of PPI complaints for “another two or three years”.
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 a reminder of how careful we all need to be when taking out new 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