Thread: An interesting snippet from the FOS Website

payment protection insurance (PPI)

year ended 31 March number of complaints 2008 10,652 2007 1,832 2006 1,315 2005 833 2004 802 2003 803 The number of payment protection complaints referred to the Ombudsman service built up gradually throughout the year – with very significant volumes of cases arriving only in the last months of the financial year. In fact, we received more complaints in the first three months of 2008 than in the whole of 2007. This resulted in an overall six-fold annual increase in the total number of disputes about payment protection policies.
From the second half of 2006 we started seeing a distinct change in the type of complaints we were receiving. An increasing proportion of disputes focused on how payment protection policies had been sold – and how they operated – rather than on insurance claims that had been rejected, which had been the cause of nearly all complaints about payment protection up until then. Concern about the selling of payment protection has attracted the attention of the media, consumer groups, the FSA, the OFT and the Competition Commission – driving the upsurge in complaints to the ombudsman service.
In considering complaints about payment protection insurance, we continue to apply our long-standing approach to the sale of insurance products – and the complaints we have seen have raised very few new issues. Applying the standards set by the law, by good industry practice since the 1990s, and in recent times by the FSA, enabled us to be clear about the approach that we take to selling insurance – and to follow this approach consistently in these cases.
We have seen fewer payment protection complaints brought by claims-management companies on behalf of consumers than some had expected. 14% of cases referred to the ombudsman service by claims-management companies involved payment protection insurance – fewer than half the number of cases that claims-management companies brought in relation to mortgage endowments.
On the other hand, we have noticed that an increasing number of consumers have actively pursued their own complaint – first with the business involved, and then with us – using standard letters and templates from newspapers and "reclaim" websites.
In dealing with the large number of disputes involving payment protection insurance, we have identified a number of general patterns and themes in the concerns raised by consumers. We have seen a significant number of complaints from consumers who say they did not ask for a payment protection policy or did not know they had one. Other consumers complain that they were told they had to take out payment protection insurance, even though they did not want it.
We have also seen many cases where consumers complain that when they took out payment protection insurance, they were not aware of relevant important features – such as exclusions which would have made them ineligible for cover.
However, we have seen significant differences in the number of cases received – and the outcome of those cases – depending on the type of payment protection policy involved. In the cases we see, for example, single-premium policies sold by a lender at the same time as the loan appear to present considerably more problems than monthly mortgage protection policies.
Particular challenges include cases where consumers' complaints are made on the basis of standard templates – where individual details may be missing – and where firms have no records of individual sales. These are the types of issues that we take forward – as part of our ongoing dialogue – with the FSA, insurers, intermediaries and consumer groups.


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One point that springs to mind is how the complaints have increased in 2008 makes me wonder how high that will climb in 2009 .