By Daniel Bentley, Parliamentary Correspondent
Increasing numbers of people are complaining about payment protection insurance (PPI) to the financial watchdog.
The Financial Ombudsman Service has seen its caseload soar since 2001, with claims against providers of loan protection, income protection, term assurance and critical illness insurance policies.
Figures released to Parliament revealed complaints about loan protection rose from 513 in 2001/02 to 833 in 2004/05. Income protection policies prompted 980 complaints in 2004/05, up from 523 in 2001/02.
The Office of Fair Trading is investigating claims of mis-selling and profiteering on PPI and the Competition Commission is due to report on its investigation into PPI sold with store cards.
Biba has branded single premium PPI policies "bad value" and wants them banned.
£350m wasted on payment protection
Customers could be wasting £350m a year on payment protection insurance which fails to pay out, according to financial research firm Defaqto.
It wants the payment protection insurance industry to improve the way it sells cover for mortgage, credit card and loan payments.
Defaqto said one reason for failure to pay on claims could be lack of customer awareness of what their policy covers. It found just one in three online loan providers and 60% of credit card firms let customers see the full terms and conditions of their insurance policy before applying for credit.
