Two in three complaints against banks upheld as record 15,000 complaints a week lodged by angry customers

Complaints to the banking watchdog have soared to unprecedented levels as banks refuse to settle thousands of  customers’ PPI disputes.
The Financial Ombudsman Service is being swamped by 15,000 a week, two thirds of which are upheld, and is having to take on an extra 1,000 staff to cope with the deluge.
Customers can appeal to the FOS when complaints made directly to financial firms are rejected, so its figures are just the tip of the iceberg.

The new figures published by the Financial Ombudsman Service (FOS) make clear that banks are continuing to reject legitimate complaints

Complaints about the mis-selling of payment protection insurance for loans, credit cards and mortgages dominate the figures, representing 10,000 a week.
In the three months to December, the FOS received 180,679 complaints from across the financial sector, including mortgage sales and pensions, bringing the total for the nine months to December to 341,666 – 29 per cent more than the total for the entire 2011-12 financial year.
A British Bankers Association spokesman said: ‘Banks are committed to handling PPI complaints efficiently.

 

‘But the actions of unscrupulous claims management companies, who refer huge numbers of claims to the ombudsman whether there are grounds to or not, mean the system is being clogged up.’
The big banks have already set aside some £12billion to compensate victims of what is the biggest mis-selling scandal in British banking history.

 

However, even this figure may not be enough and the banks are making attempts to put a time limit on any new claims.

The findings suggest the big banks, some of which would not exist but for being rescued by billions of taxpayer pounds, continue to treat customers with contempt

PPI was sold to customers on the basis that it would provide a financial safety net, covering repayments to the bank if they suddenly lost their job or fell ill.
However, it was pushed by hard-sell bank staff, many working on commission, to people who would never be able to make a claim, including part-time and seasonal workers, pensioners and others with long-standing illnesses. 
The ombudsman said it is upholding 66 per cent of PPI complaints, which only reach the ombudsman after the customer has been turned away by their bank.
FOS is having to take on an extra 1,000 staff to try to handle the avalanche of complaints from across the financial sector, including sales of mortgages, pensions and the management of share portfolios.
PPI is not the only area where complaints are rising sharply. FOS said there were 1,893 complaints about life insurance policies between October and December, which was up by 26 per cent on the same period a year earlier.
Complaints about personal pensions rose 18 per cent to 1,537, with 33 per cent upheld, while investment portfolio management complaints were up by 24 per cent to 1,173, with 53 per cent upheld.
Executive director at the consumer champion, Which? Richard Lloyd said: ‘PPI is now the biggest financial mis-selling scandal of all time and the banks should be proactively contacting their customers and making sure it is as easy as possible for those with a legitimate claim to get their money back, without any hassle.’ 
The banks recently asked the FSA to consider setting a deadline for customers to claim compensation for mis-sold PPI amid fears about the uncertainty that the rising bill is creating for investors.