Some consumers who have previously complained about PPI may get a final response from businesses this summer – about a year after the deadline for registering a gripe with the firm.
The deadline for customers to complain to firms about PPI (payment protection insurance) mis-selling was August 29 2019.
The Financial Ombudsman Service (FOS), which has been clearing up PPI mis-selling disputes where consumers and firms cannot agree, said: “Businesses have reported they were working through millions of customer inquiries and complaints, and have told the FCA that it will be summer 2020 before they’re able to give some customers a response.
“Consumers then have up to six months to complain to us.”
In the past, the insurance was often added on to loans and credit agreements by firms without people wanting or needing it.
The ombudsman service said it has been encouraging consumers to wait for businesses to respond, despite this taking longer than the usual eight-week response window that firms have, “as it’s likely they’ll get an answer more quickly this way”.
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— Financial Ombudsman Service (@financialombuds) June 3, 2020
The ombudsman service, which published its 2019/20 annual complaints data for financial products on Wednesday, said it had received about half the number of PPI complaints than had been anticipated.
Some 122,153 new PPI complaints were received, although the service had anticipated handling up to 250,000 new cases – “reflecting the significant amount of complaints the deadline might generate”.
The service said: “Partly because of the huge number of complaints that businesses received in the weeks before the deadline, we haven’t yet seen as many complaints as we expected.”
The FOS said it did see a spike in PPI inquiries around the deadline, but towards the end of the 2019/2020 year, PPI inquiries fell significantly as consumers and businesses’ attention shifted to the immediate priority of managing the impact of Covid-19.
It added: “We will be keeping in close touch with the FCA (Financial Conduct Authority) and businesses to understand how 2020/21 is likely to develop.”
Overall in 2019/20, the service received fewer complaints than in the 2018/19 financial year. This was mainly due to a general reduction in PPI complaints and short-term lending.
Some 271,468 new complaints were received in 2019/2020, compared with 388,392 in 2018/19.
The FOS did see year-on-year increases in some types of complaints, for example regarding instalment loans (10,880 complaints were received in 2019/20 compared with 5,162 in 2018/19) and guarantor loans (1,043 complaints were received in 2019/20 and 529 in 2018/19).
Caroline Wayman, chief ombudsman and chief executive of the FOS, said: “The unprecedented Covid-19 situation has already given rise to many new and complex questions of fairness when things go wrong in financial arrangements.
“If customers are unhappy with how a financial business has treated them, they can come to the Financial Ombudsman Service for free, and we will see if we can help.”