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PPI pay-outs to rocket in 2013

10th January 2013

The Financial Ombudsman Service has stated in it's annual forecast that it expects to resolve 245,000 cases of mis-sold PPI, compared to the 90,000 it has dealt with this year. 

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.

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.

These additional charges will allow the FoS to employ an additional 1,000 staff over the coming year. 

Posted in PPI, UK, Banking, Mis-selling Scandal, Payment Protection Insurance, Refunds, Financial Ombudsman Service

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