Payment protection insurance (PPI) has of course been the largest mis-selling scandal the UK has ever seen, and millions of consumers have collectively received billions in compensation. However, PPI complaints can only be made up until August 29 2019, and many industry commentators have offered their own opinions as to what might be ‘the new PPI’, i.e. what area consumers and claims management companies might turn their attentions to once the PPI saga has ended.
Self-invested personal pensions, Personal Contract Plans and other car finance arrangements, packaged bank accounts, fees charged by credit brokers and the lending and collection practices of payday lenders have all been suggested as areas in which large numbers of complaints might be made.
The chief ombudsman at the Financial Ombudsman Service (FOS) has now offered her own opinion, and has suggested that the next large-scale complaints issue could be the way firms use client data.
Caroline Wayman has suggested that allowing firms to make greater use of client data has in some ways improved the services offered to consumers, but added that better consumer protections would be needed as a result
Having seen her organization forced to triple its staff numbers to cope with the PPI deluge, Ms Wayman appeared before Parliament’s Treasury Select Committee in January 2018, where she said:
“There are quite a few areas of our work where you see the convenience versus security as a real inherent tension.
“Faster payments is something that, on the whole, people welcome and it is great that you are not waiting however many days for cheques to clear.
“It is great, mostly, that you can take out a loan very quickly through a few clicks on your phone but there is also with that greater convenience there is also the flip side of that, when things go wrong and the need to protect against things going wrong and how people use their data.
“I think that is a really interesting area. Not just big data, but in general. I think that is an area to watch.”
At the same meeting of the Select Committee, Annette Lovell, director of engagement at the FOS, expressed some of the same concerns, in saying:
“We were talking recently about the increasing tension that there is between the desire to provide ever more products to individual consumers and the need to ensure that consumers privacy and data is protected.
“You can see there is a potential tension there and if those things aren’t managed well by financial businesses that is a potential area of concern. That is something we would want to keep an eye on.”
Ms Wayman also told the Select Committee that, as PPI complaint volumes decrease after the 2019 deadline, she will move her permanent staff away from PPI onto other product areas, and will make use of contractors to handle PPI claims for as long as is necessary. She also said that an increase in payday loan complaint volumes was the biggest change her organisation had experienced in the more recent past.
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