The Financial Ombudsman Service has forewarned that record numbers of PPI complaints will impact the levy paid by business.
The Financial Ombudsman Service has warned record numbers of complaints about payment protection insurance will impact the levy paid by business to the ombudsman.
According to figures released yesterday, complaints about PPI made up 50 per cent of all those received by the ombudsman, up from 45 per cent in the previous three months. FOS received 21,300 PPI complaints in the three months to December, compared to 25,000 in the three months July to September.
Natalie Ceeney, chief executive and chief ombudsman at the FOS, said the figures as a whole reveal that complaint numbers in some categories are levelling off, or even starting to fall, but that she is concerned about how PPI complaints are being dealt with by some firms.
She says: “A number of major businesses are now telling us they do not intend to respond substantively to many of these complaints until a final outcome of the British Bankers’ Association lead judicial review over PPI complaints is known. Regrettably, this means many thousands of consumers are now not getting straight forward answers from some businesses.”
Last month FOS said they will ask for a levy increase of up to £30m if firms stop paying case fees pending the outcome of the BBA’s judicial review. The FOS will recommend to the FSA that the additional levy be attributed to the fee block that generates most of the FOS’ workload. For PPI, this would be the banks and other PPI providers.
Ceeney says: “It is because of the operational risks and challenges these problems present – as we plan to deal with significant shifts in demand for our service – that we are consulting on building up our financial reserves.”
The number of PPI complaints resolved in favour of the consumer has fallen through the year. In the three months to December 2010 the figure was 66 per cent, down from 73 per cent in the three months to September and 81 per cent for the three months to June. The previous year 89 per cent of complaints were resolved in the consumer’s favour.
Mortgages made up four per cent of complaints and mortgage endowments 1 per cent. Current accounts accounted for 10 per cent of complaints and credit cards eight per cent.