Thousands of complaints continue to be made every week in relation to payment protection insurance, with finance leaders warning the scandal will last for ‘years’, the agency responsible for handling complaints reported today.
In its budget for the year ahead, the Financial Ombudsman Service says that it expects to resolve around 320,000 PPI cases in 2014/15 in what has been a ‘challenging year’.
Banks and other financial institutions are paying compensation to people mis-sold the insurance to cover them in the event of being unable to work.
The rate of new cases coming into the ombudsman, which handles complaints about banks and financial institutions, has fallen from a peak of 12,000 a week in late 2012 to current levels of 4,000 a week. This is still twice as many cases as all other areas of complaints put together.
Caroline Wayman, chief ombudsman, said the number of complaints about PPI is ‘starting to stabilise’ but the issue is far from being resolved.
‘Complaints about PPI are still the main driver of financial disputes,’ she said. ‘And although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.’
At the start of 2014/15, the ombudsman had 400,000 PPI cases to resolve: the service intends to reduce this to 280,000 by March 2015. The aim is to cut the number of outstanding cases by a further 100,000 in 2015/16.
In total the ombudsman has received more than 1.25m PPI complaints – most of which have arrived in the last two years.
Currently, PPI caseload accounts for 87% of the ombudsman’s work, and the service intends to recruit an additional 200 adjudicators and ombudsmen in 2015/16 to cope with demand.