PPI complaints down 66%

The volume of payment protection insurance complaints plunged last month, according to new Financial Ombudsman Service statistics.

The ombudsman’s latest quarterly survey shows that the number of PPI cases dropped 66% from from 56,025 to 19,259 between July and September.

But the figures also show that the FOS is upholding 92% of complaints.

The same report shows an across the board increase in complaints about many general insurance products.

The number of complaints about car and motorcycle insurance products increased from 1,741 to 2,116. For buildings insurance, the total increased from 1,225 to 1,505, while the volume of travel insurance cases was up from 582 to 728.

The total of mobile insurance complaints increased nearly 50% from 119 to 177.

Once PPI complaints were taken out of the equation, the total number of complaints to the ombudsman was up 24%.

A FOS spokeswoman said that the fall in PPI complaints had been ‘expected’ this quarter.

Commenting on the PPI figures, Pinsent Masons strategic business services senior associate Philippa Handyside said: “While the drop in PPI complaints to the FOS of 66% is significant and indicates that the peak of complaints has passed, it does not mean that those involved in the PPI industry are out of the woods. 

“Media coverage and advertising by claim handling firms have flushed out most of those with cause to complain about the mis-sale of a PPI product. However, the FOS has also upheld a staggering 92% of PPI mis-selling complaints. Such odds mean that firms are settling a greater portion of complaints as part of their own complaints handling procedures, knowing that their chances of successfully defending a sale to the FOS are very slim. This explains some reduction in complaints reaching the FOS but does not reflect an equivalent reduction in PPI compensation payments.

“There are a number of issues arising from the FOS approach to PPI complaints which are still unresolved.  The FOS has directed complaints to PPI product providers where the PPI distributor was unregulated at the relevant time on the basis that the product provider is “responsible” for the sale of its products, in some cases driving a coach and horses through the long established common law principles of agency on which the parties planned their arrangements. The logic employed by the FOS in such cases could equally be applied where the distributor is no longer able to pay claims or even where they simply wish to share responsibility with the product provider.  If the recent approach of the FOS to PPI mis-selling is carried through to the tail of remaining complaints, there could be plenty of pain yet for PPI distributors and product providers alike.”