subject: Ppi Compensation Payouts Set To Rocket, After Spike In Ppi Complaints [print this page] The Financial Services Authority (FSA) has revealed that complaints about PPI mis-selling have rocketed.
In April 2011, the British Bankers' Association (BBA) lost a judicial review into the FSAs stance on handling PPI regulation, which it had challenged - the BBA did not appeal against the High Court ruling and this opened the floodgates for consumers being able to reclaim PPI.
As many as three million consumers became entitled to claim PPI compensation after the ruling - and the total payout by banks for mis-sold PPI policies could top 9 billion by the time all the outstanding claims have been settled.
In the second half of 2011, complaints about PPI mis-selling and insurance broke through the one million mark to reach 1,280,940 complaints for the year - the highest total of consumer complaints about financial institutions since FSA records began in 2006.
The second half of 2011 saw complaints about PPI mis-selling increase by 85% to reach 977,510 complaints - PPI complaints totalled more than half of all complaints against financial institutions for the period.
PPI compensation payouts by banks totalled 1.9 billion in 2011 - and experts say these will rise because of the BBA's defeat at the High Court last year. The FSA published a report in 2005 calling on PPI sellers to make sure their sales procedures met guidelines set by the SFA.
Reacting to the 2011 spike in PPI complaints - which could all lead to more consumers seeking a PPI refund - the executive director of consumer publication Which?, Richard Lloyd, said:
The increase in PPI complaints further demonstrates just how widespread PPI mis-selling was.
"We now need to see the banks take action and deal with these complaints quickly and efficiently - and the Financial Services Authority must take action against anyone dragging their feet settling complaints."
The FSA received around 1.5 million complaints about PPI mis-selling between 2005 and early 2011 - many consumers went on to reclaim PPI, but it is thought banks have disputed as many as 60% of PPI compensation claims.
Claims for a PPI refund which have been rejected by banks can be submitted to the Financial Services Ombudsman (FOS), however - and many of these PPI compensation claims have been passed by the FOS.
Many claims for PPI compensation were also held up during the judicial reviewed brought by the banks - the FSA said an increase in the total amount of money paid out in PPI compensation in 2011 was due to banks catching up with a backlog which had built up as a result of the banks' challenge to the FSA.
Many consumers choose to appoint reputable firms of claims handlers - known as claims management companies (CMCs) - rather than face the banks by themselves to reclaim PPI.
Which? executive director Richard Lloyd said that the sharp increase in complaints about the mis-selling of PPI in 2011 suggested that some banks "are still failing to treat their customers fairly when things go wrong".
PPIrefund4me is a regulated claims management company that specialises in seeking PPI refunds for clients who have been mis-sold PPI policies.
Call PPIRefund4me today for free on 0800 044 5196 or visit www.ppirefund4me.co.uk for more information.
