PPI cases rocket

The final three months of last year saw a fresh spike in PPI (payment protection insurance) complaints, new FOS (Financial Ombudsman Service) figures show.

The FOS’s complaint statistics for October to December 2011 record that the ombudsman received 30,301 PPI complaints, up more than a half from the 19,259 in the year’s second quarter.

The figure for the third quarter of 2011/12 is down on the 56,025 received between April and June, the year’s first quarter but is more than the total of 49,196 recorded during the whole of 2009/10.

Overall PPI cases accounted for 54% of all complaints to the FOS in the three months from October to December 2011.

Of the PPI cases submitted to the ombudsman, 68% were resolved in favour of the consumer.

The statistics also show that complaints for all other categories of general insurance fell between the second and third quarters of the current financial year.

A National Audit Office report on the FOS, published last week, showed that 45% of all PPI cases were submitted by claims management companies.

In her introduction to the latest ombudsman news, which contains the statistics, FOS chief executive Natalie Ceeney writes that the volatile nature of mass complaints like PPI makes it difficult to establish a stable funding regime for her service.

She writes: “The way we’re currently funded has also made it difficult to manage the financial risks and cost pressures that we face in responding to volatile demand for our service. This has particularly been the case in relation to so-called ‘mass complaints’ like mis-sold payment protection insurance [PPI], which now make up over 50% of our cases (but five years ago accounted for just 2% of our workload).”

The latest FOS budget proposes reform to the way the service is funded by shifting it onto the shoulders of the big companies, like the high street banks, which generate the bulk of complaints.