PPI complaints 'up 70%' as campaigns hit home

18/03/2009

Loans insurance complaints have shot up over the past three months, figures from the Financial Ombudsman Service (FOS) show.

The 70 per cent increase has been attributed by the complaints service to successful campaigns on the fairness or otherwise of Payment Protection Insurance (PPI) from consumer groups such as Which?.

PPI works by covering loan repayments for people who suffer a sudden drop in income, such as those who are made redundant.

However, it has faced fierce criticism for offering policyholders poor value for money and for being mis-sold by financial firms as a "default" option with the loan - rather than a standalone extra.

Upheld complaints could force the PPI providers to compensate customers, potentially proving very costly for the firms.

Speaking to the Independent, FOS spokesperson Emma Parker said: "Clearly, there's been a lot of media attention [on PPI], as well as campaigns run by Which? and [financial website] Money Saving Expert.

"But we've also got financial conditions worsening, so some consumers might be pursuing complaints where they might not have in the past."

The FOS data showed that around 850 complaints on PPI are currently being received each week.

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt, Retirement Money Problems, Young Family Finances,

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