PPI complaints more than double

The number of payment protection insurance complaints to the Financial Ombudsman more than doubled last year, according to the organisation’s latest annual review.

The report, published this morning, shows that the ombudsman received 104,597 new PPI cases in 2010-11 - the highest number ever received in a year about a single financial product.

The figure represented a 113% increase on the number of cases received in the previous year - itself a 58% rise on 2008-9. PPI complaints accounted for 51% of all new complaints to the ombudsman.

The review says: “Our workload this year has been dominated by one type of case – complaints about the sale and suitability of payment protection insurance (PPI).”

It also shows that the volume of complaints about motor and travel insurance increased by 6% to 5,874 and 27% to 2,536 respectively.

But the review says that the number of complaints about travel insurance did not increase as much as expected in the wake of last April’s Icelandic volcano eruption, which caused massively disrupted airline schedules.

It says: “The widespread expectation had been that we would need to gear up to deal with thousands of ash-related travel-insurance disputes. But fortunately, these disputes never happened on that scale. Instead, the majority of travel insurers extended cover to their customers where travel policies may have been ambiguous – and sorted out problems quickly with their customers where they arose.”

The level of complaints about health and home contents insurance fell.

The number of non-PPI insurance complaints was 20,978 - 10% of the total. The overwhelming majority (75%) of insurance-related complaints, including PPI, were about sale and advice.

Complaints about insurance made up 61% of the total number of new cases submitted to the FOS during the year, compared to 42% in the previous year.

The report also shows that half of all the disputes referred to the ombudsman service involved four of the UK's largest financial services groups, while 2,131 businesses had just one complaint each.