It has been revealed that the number of PPI complaints referred to the Financial Ombudsman Service has grown by nearly 60 per cent in the last quarter.
It has emerged that the number of PPI complaints referred to the Financial Ombudsman Service has increased by almost 60 per cent during the last quarter.
In a report published this week, the FOS received 30,301 PPI complaints between October and December – an increase of 57 per cent from the 19,259 PPI complaints in the three months prior to September.
Despite the number of PPI complaints having increased over the period, the proportion being upheld has dropped from 92 per cent to 68 per cent between June and September. The FOS is anticipating the arrival of 165,000 fresh PPI complaints throughout 2012/13, accounting for around 60 per cent of new cases.
Complaints relating to mortgages are down 14 per cent over the last three months, from 2,796 to 2,383. During the same period 24 per cent were upheld, whereas personal pension complaints have also decreased 11 per cent from 506 to 450, with 35 per cent upheld.
In contrast, complaints relating to unit-linked investment bonds plateaued at 194, with 59 per cent of complaints upheld.
The FOS is subsidised by a blend of case fees and an industry levy. It is understood that the ombudsman is considering introducing an additional case fee of £350 from April, on top of the current case fee of £500, for each PPI complaint received from institutions that have more than 25 PPI complaints referred to the FOS annually.
FOS chief executive Natalie Ceeney says: “The challenges of our PPI workload are unprecedented. Initial feedback from stakeholders suggests that most believe we will continue to receive substantial volumes of PPI complaints for another two to three years. This seems a sensible basis on which to plan, given the size of the PPI market, the number of PPI complaints made direct to banks and other financial businesses last year alone, and the potential extent of detriment to consumers.”
Additionally, the FOS are planning to increase the ‘free-case’ allowance small firms have each year before having to pay the £500 case fee from three to 25 a year. If agreed this would come into effect in April 2013.