PPI claims to be reassessed by banks: 2.5 million cases may not have been handled fairly
PPI has reared its ugly head again as the financial conduct authority ordered more than 2.5 million claims to be re-examined to ensure compensation was "fairly made".
The financial regulator said banks, credit card providers and personal loan companies have agreed to reassess complaints about mis-sold payment protection insurance made in 2012 and 2013.
An investigation by the FCA into a fall in upheld complaints in these years found they may not have been handled fairly. The average uphold rate fell to 60 per cent by the end of 2012.
More than a million complaints were received by the Financial Ombudsman Service from people unhappy with the outcome decided by the provider which sold them the PPI – around a quarter of all rejected complaints.
FCA boss Martin Wheatley said:
Making sure anybody previously mis-sold PPI is treated fairly now, and paid redress where it's due, is an important step in rebuilding trust in financial institutions. In around two and a half million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again.
The process is now working well; in just over three years £16bn has been put back into the pocket of the consumer – that is unprecedented. Given the enormity of this exercise it is no surprise that there have been some issues along the way but our approach is delivering a good result for consumers.
The watchdog said it expects to scale back its PPI work during 2015 however, as the number of people making claims begins to fall. So far, 3.2 million letters have already been sent out to those thought to have been mis-sold PPI and not yet claimed, with another 2 million due to be sent in the coming months.
Since 2007, more than 13 million PPI complaints have been handled and payouts totalling £16bn have been made since 2011.