The Financial Ombudsman Service (FOS) has reported a 27 per cent increase in complaints in the first six months of. The FOS said they had received 135,170 new complaints in the first half of the year, up 27 per cent on the six months previous. Of those, 85,562 or 63 per cent were about payment protection insurance (PPI). This is an increase of 75 per cent on the last six months of. Within this figure, 71 per cent, around 60,000 of the PPI complaints were upheld in favour of the consumer. This is a far higher success rate than for any other type of complaint. The FOS data shows that complaints against some types of businesses were upheld in nearly all cases, in particular those against major high street banks and credit card companies.
The FOS deals with complaints if the customer and financial institution cannot come to an agreement themselves. Lloyds TSB, which has the highest liability for PPI compensation, had a staggering 98 per cent of complaints against them upheld. Lloyds TSB were the first bank who chose not to appeal against a High Court. Judgement that the banks lost, bought against them by the Financial Services Authority (FSA). As a consequence the bank set aside nearly £3 billion for compensation to customers who were mis-sold PPI. As its exposure to the biggest mis-selling scandal in the last decade became apparent as more and more claimants came out of the woodwork, Lloyds TSB has increased its provision to £4.27 billion.
In total, banks have set aside £10 billion to cover compensation for the mis-selling of PPI.
Other banks were close behind Lloyds TSB. MBNA had 97 per cent of complaints upheld against it, Barclays 93 per cent, Bank of Scotland, 90 per cent, HFC (part of HSBC) had 90 per cent and NatWest 89 per cent. Natalie Ceeney, chief executive and chief ombudsman, said: “The volume of PPI complaints doubled in the first half of – and has continued to increase since then with up to 1,500 new cases now arriving each day.”