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Scotland Wide PPI Specialists

The Challenge of PPI

18 July 2016

It is easy to forget that behind the numbers are real people, customers who have faced years of financial hardship paying for an insurance policy that they thought would help them in times of need - only to discover that they had been sold a policy that was worthless and useless to them.

The latest from the Financial Ombudsman

The Financial Ombudsman Service - also known as FOS - has the unenviable task of deciding who is right in a dispute between a customer and a bank, lender or another financial company. They deal with all kinds of financial products, with payment protection insurance (PPI) being just one of them.

As you can imagine, FOS has been dealing with thousands upon thousands of complaints relating to PPI over the last few years, and the information recently released by them makes for sobering reading;

  • In 2015, FOS have dealt with 260,000 PPI cases - although FOS knew that it would need to place a lot of resources into dealing with PPI claims, they dealt with 10,000 more cases than they expected.
  • They expect that by March 2017, they will have dealt with another 270,000 cases - even though many banks and lenders would have us believe that PPI compensation claims are slowing down

Not just numbers

It is easy, however, to just see the numbers, forgetting that behind these 260,000 PPI compensation cases are real people - and some of these people have had to wait a long time to get a resolution to their PPI compensation claim.

In many cases, the greatest enemy has been time. The length of time people has had to wait for a resolution to their case is impacted by two main factors;

  • Number of cases - FOS is dealing with an unprecedented level of demand for their services. PPI is not the only product that they deal with. Alongside side teams working on PPI compensation claims, the organisation is still looking at other financial disputes, including nearly half a million complaints relating to current accounts.
  • Increasing complexity of cases - initially, PPI cases referred to FOS were simple and relatively quick to resolve. This was in part down to the banks being reluctant to pay compensation claims. Attitudes have changed thus banks and lenders are making more of an effort to resolve PPI cases quicker and without involving FOS. Thus, the cases being referred to it are becoming more complex. By their nature, this means that FOS need to spend more time on resolving the complaint regarding how PPI was sold to the customer.

FOS are aware of all these issues and how it impacts on the customer which is why they are making more resources available to deal with PPI compensation disputes. This will mean more cases resolved and hopefully, much quicker benefitting the customer.