PPI payouts expected to rocket in 2013
FOS's ability to hire more staff means it expects to resolve 245,000 PPI mis-selling cases in the next financial year
A record number of consumers will receive payouts from banks in 2013 over mis-sold payment protection insurance (PPI) policies, after the Financial Ombudsman Service said it expected to resolve almost three times as many cases as in the current financial year.
In its forecast for the next financial year, the FOS said it expects to resolve 245,000 cases related to mis-selling PPI compared to the 90,000 it has dealt with this year. It expects to receive the same volume of PPI cases – about 250,000.
Consumers can take their cases to the FOS when they have failed to resolve the complaint with their bank or other financial firm. However, the FOS has been deluged with PPI complaints in the past two years, meaning in some cases it is taking up to a year to resolve them.
Tony Boorman, deputy chief ombudsman, said: "Two years after the court ruling confirmed the approach that financial businesses should take when handling PPI complaints, it's disappointing we are still seeing significant numbers of unresolved disputes about mis-sold policies being referred to the ombudsman.
"While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience. This has a marked impact on our workload."
The FOS plans to increase the fee from £500 to £550 it charges banks for each case it deals with, the first time it has risen in five years. Banks will also continue to be charged the recently introduced upfront fee of £350 for each case, in addition to the £550 paid at the case's conclusion.
In addition, the levy financial services companies pay to fund the service will rise from £17.7m collectively to £23m. This will be predominantly met by the high street banks who bring the largest volume of complaints to the FOS.
The increased charges will allow the FOS to take on 1,000 additional case workers, the majority of who will work on PPI complaints exclusively.
The service will also increase the number of ombudsmen who are qualified to deal with more entrenched disputes to reflect what the FOS describes as a "shift towards complex and harder-fought cases". It will reduce the number of smaller businesses that pay case fees by increasing the number of free cases a company can bring to the FOS from three to 25.
Source: PPI payouts expected to rocket in 2013 | Money | guardian.co.uk
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FOS's ability to hire more staff means it expects to resolve 245,000 PPI mis-selling cases in the next financial year
A record number of consumers will receive payouts from banks in 2013 over mis-sold payment protection insurance (PPI) policies, after the Financial Ombudsman Service said it expected to resolve almost three times as many cases as in the current financial year.
In its forecast for the next financial year, the FOS said it expects to resolve 245,000 cases related to mis-selling PPI compared to the 90,000 it has dealt with this year. It expects to receive the same volume of PPI cases – about 250,000.
Consumers can take their cases to the FOS when they have failed to resolve the complaint with their bank or other financial firm. However, the FOS has been deluged with PPI complaints in the past two years, meaning in some cases it is taking up to a year to resolve them.
Tony Boorman, deputy chief ombudsman, said: "Two years after the court ruling confirmed the approach that financial businesses should take when handling PPI complaints, it's disappointing we are still seeing significant numbers of unresolved disputes about mis-sold policies being referred to the ombudsman.
"While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience. This has a marked impact on our workload."
The FOS plans to increase the fee from £500 to £550 it charges banks for each case it deals with, the first time it has risen in five years. Banks will also continue to be charged the recently introduced upfront fee of £350 for each case, in addition to the £550 paid at the case's conclusion.
In addition, the levy financial services companies pay to fund the service will rise from £17.7m collectively to £23m. This will be predominantly met by the high street banks who bring the largest volume of complaints to the FOS.
The increased charges will allow the FOS to take on 1,000 additional case workers, the majority of who will work on PPI complaints exclusively.
The service will also increase the number of ombudsmen who are qualified to deal with more entrenched disputes to reflect what the FOS describes as a "shift towards complex and harder-fought cases". It will reduce the number of smaller businesses that pay case fees by increasing the number of free cases a company can bring to the FOS from three to 25.
Source: PPI payouts expected to rocket in 2013 | Money | guardian.co.uk
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