30,000 FOS PPI Complaints- Name and Shame Offenders Says Burgess

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As the level of Payment Protection Insurance complaints to the Financial Ombudsman Service continues to rise, PPI lobbyist Sara-Ann Burgess is calling upon the Financial Services Authority to 'name and shame' lenders that fail to investigate complaints properly.

Sara-Ann Burgess, MD Burgesses

This tool will undoubtedly increase the number of complaints, so we need urgent action now to ensure lenders address their mis-selling issues and handle complaints responsibly at the outset. The onus should not be on the FOS to investigate thousands of PPI cases - credit providers must stop dragging their feet and abdicating their responsibility over complaints.

As the level of Payment Protection Insurance complaints to the Financial Ombudsman Service continues to rise, PPI lobbyist Sara-Ann Burgess is calling upon the Financial Services Authority to 'name and shame' lenders that fail to investigate complaints properly.

The FOS predicts that by the end of its financial year next week it will have received 30,000 PPI complaints from consumers who were unable to get their mis-selling charges resolved. For the first nine months of the tax year, the FOS says 500 cases were coming in on a weekly basis, but after Christmas this soared to over 800 a week, which in its opinion is unacceptably high.

Such is the FOS's concern over the number of complaints that should have been dealt with 'in-house' by lenders that its Board approached the regulator towards the end of last year advising FSA members were breaking Treating Customers Fairly guidelines and suggesting their actions were causing wider consumer detriment.

The FOS would like to see the leading banks and building societies, who account for more than 80% of policies sold, adopt more robust complaint- handling procedures, learn from the complaints they're receiving and apply root-cause analysis to avoid further complaints of a similar nature occurring.

Sara-Ann comments: "At least 90% of PPI complaints, and in the case of one lender, 100% of complaints, are upheld by the Ombudsman. Rather than try and put things right for their customers, lenders are happy to resort to delaying tactics, knowing if they issue a complaint rejection letter, over half of the recipients will accept the findings at face value and not bother to pursue further via the FOS. Those who do have the resolve to take their complaint further find they were invariably right to do so."

"This means the real figure of those who have been mis-sold PPI could be far higher. It's a double whammy - underhand tactics are used to mis-sell the cover in the first place and now those same tactics are employed to avoid recompensing people. Why isn't the FSA reigning in its members more? Firms are legally required to update their processes to meet the regulator's requirements and yet the FSA's turning a blind eye to those who aren't. Widespread consumer detriment cannot be allowed to continue - the regulator needs to name and shame the perpetrators and ensure they clean up their act."

The FOS believes its 30,000 case load has now peaked and predicts cases will be around 20 - 25,000 for the next financial year. However, Sara-Ann counters that with the recent launch of the Which? online PPI complaints tool, thousands more will now find it easier to seek redress over the mis-selling of policies and suspects the 30,000 peak is the tip of the iceberg.

"This tool gives consumers greater confidence in making their initial complaint and once they realise their lenders' complaints rejection is the norm and purely a staling tactic, it opens the floodgates for more cases to go to the FOS."

Visitors to the Which? PPI website select a provider from a drop down menu, compete their contact and PPI details and explain why they believe their policy was mis-sold. The tool then creates an email which is sent directly to the provider, or a letter can be printed off and posted.

Sara-Ann concludes: "This tool will undoubtedly increase the number of complaints, so we need urgent action now to ensure lenders address their mis-selling issues and handle complaints responsibly at the outset. The onus should not be on the FOS to investigate thousands of PPI cases - credit providers must stop dragging their feet and abdicating their responsibility over complaints."

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