Eight out of every ten complaints that consumers refer to us at the ombudsman are about payment protection insurance (PPI). And with around 2,000 new cases arriving every working day, the ombudsman is taking on its biggest job ever.
With this volume of complaints arriving, it’s going to take us years, not months, to sort out all the issues involved. This is why we have significantly scaled up our operation.
So for customers who have a complaint about PPI – or who are just wondering how we’re tackling this issue – here’s some information that should help.
With an estimated £50 billion worth of PPI policies sold over the last ten to fifteen years – by hundreds of different financial businesses – millions of people have already complained about PPI mis-selling. And billions of pounds have already been paid out in compensation.
This is why people are calling this the biggest mis-selling scandal in financial services history. And this is why it’s expected to take years, not months, to sort out all the issues involved.
To complain about being mis-sold a PPI policy, you first need to contact your bank or the financial business that sold you the policy.
You don’t need to use a claims manager. They won’t get you a faster or different result. But they will take a significant proportion of any compensation you might get.
You’ll need to give the financial business as much information as you can about your complaint. It might take you a bit of time to remember all the facts – and to find the paperwork. But using the standard PPI questionnaire (Word or PDF version) will make it easier for you to organise and write down the main facts of your case.
Your bank or financial business should respond within 8 weeks. And they should pay you promptly if they owe you any compensation.
But if you have your PPI complaint turned down by the financial business – and you don’t agree with the reasons they give you – you can come to the Financial Ombudsman Service for an independent review of your case.
If you’re not happy with how a bank or financial business has looked at your PPI complaint, we can review the case – from an entirely independent standpoint.
We look carefully at both sides of the story and we weigh up all the facts.
If we decide the bank or financial business has treated you fairly – and did not mis-sell your PPI policy – we will explain why. But if we decide that the business acted wrongly, we can order it to put things right.
When we review PPI complaints that financial businesses have already turned down, we uphold around two thirds of them – on average – in favour of the consumer.
We're continuing to receive record numbers of complaints. And 2,000 people are now asking us for help with PPI every working day. In total we’ve had over 800,000 PPI complaints – the largest number of cases we have ever received about a single financial product.
Each of these complaints needs to be reviewed and assessed individually by one of our fully trained and skilled casehandlers. So to work through all the cases – and resolve all the issues – it's going to take significant amount of time.
But we're making good progress – in the last three months alone we have sorted out over 115,000 complaints for people.
We’ve already recruited over 1,000 new casehandlers and 50 new ombudsmen, to help review and decide individual PPI cases. And as volumes of PPI complaints have continued to increase at record levels, we’re taking on a further 1,000 new casehandling staff throughout the year.
But recruiting the right kind of people – with the special kind of skills and perspective needed to resolve disputes – is only the first bit of the challenge. It takes around six months – and a lot of expert guidance and supervision – for a new casehandler or ombudsman to become fully trained up. So recruiting lots of people fast isn’t the simple answer to resolving more cases more quickly.
Worries about PPI have been raised for many years. We expressed concern about the mis-sale of PPI in ombudsman news issue 4 (April 2001) and again in ombudsman news issue 50 (November/December 2005). And Citizens Advice raised a formal so-called “super-complaint” to the regulators in 2006.
But many people only became aware of the PPI mis-selling issue in 2011, when the major banks lost their court action against the regulator and the ombudsman. Since then, complaint volumes have risen to record levels.
No one knows for certain how many more people will complain about PPI – or how much longer the current volumes of new cases will go on for. This makes it very difficult to forecast the scale of our task in resolving all of these issues.
But at current levels, it looks likely that it will take us at least three years – even once we have recruited and fully trained up all our new staff.
This doesn’t mean that each individual complaint will take that long to resolve, but some cases might. However, others we will be able to sort out in just a few months.
How long your case takes to resolve will depend on a number of things including:
Our priority is to give everyone an assessment of their case as soon as possible. Telling you – upfront and honestly – whether or not your case looks like one that we’ll uphold helps many people with their decision on whether it’s worthwhile pursuing the matter further.
This all means we’re unlikely to be able to give you a detailed timetable for how long it will take to resolve your case – other than to assure you that we will try and sort it out as fast as we possibly can.
Once you’ve sent us your PPI complaint – and we’ve acknowledged it – you don’t need to do anything else. It’s generally a case of “don’t call us, we’ll call you”. Your complaint is safely with us and we'll be in touch when we've made progress on it.
In fact, the more people call us for an update, the less time we have to sort out the complaints that are already with us.
Of course, if there's a significant change in your circumstances – for example, if you're seriously ill or your address has changed – we want to hear from you. But generally we’ll only get in touch with you if we need more information.
For more details about our approach to PPI complaints, have a look at our online PPI resource.
We have specialist teams of casehandlers across the Financial Ombudsman Service focusing on all different areas of work – for example, on complaints involving current accounts, consumer credit, pensions, mortgages and insurance.
These teams are unaffected by our PPI work, which we are managing completely separately. In other areas of our work, we’re able to resolve well over two thirds of cases within six months.