Ombudsman To Investigate 4,000 PPI Claims This Year
by Stewart Douglas
The Financial Ombudsman has today announced that it is continuing to investigate some 4,000 claims of mis-sold payment protection insurance despite moves made to clamp down on rogue selling of incomplete and inadequate cover to consumers.
The announcement follows an ongoing battle by the Financial Services Authority to eradicate unscrupulous policy sellers and to clear up the market that has often been blurred by overly technical policy wording and contractual terms.
Payment protection insurance is a type of policy designed to serve as a backup to inability to meet loan or mortgage repayments as a result of illness or short term unemployment, and by its nature is a technical and complex policy to create.
Nevertheless there are around 20 million PPI policies across the UK, which some market analysts suggest could be made up of around 50% missold policies. The Financial Ombudsman’s announcement reflects almost 100% growth in the number of claims it has been required to investigate, despite the wider clampdown on the way PPI policies are sold.
Many consumer customers have reported misselling of PPI cover, with brokers bundling it in with other costs and fees or failing to explain the true extent of the cover, and what is excluded by the policy wording.
Additionally, an extra statutory concession that the insurance industry will not rely on points of legal technicality in consumer cases seems not have been reflected in the policy wording of many PPI cover products, according to industry analysts.
The FSA has come under criticism for its part in not effectively tackling the problem, whilst the industry as a whole has been under fire for taking advantage of seemingly lax regulation in this regard.
Whilst some analysts have suggested the increased public awareness of PPI cover as a result of media interest could be behind the rise in claims filtering through to the Ombudsman, few are in any doubt that standards within the industry as to the selling of PPI cover continue to be grossly inadequate.