The Financial Ombudsman Service (FOS), the independent body that adjudicates on complaints when the customer and a financial institution cannot reach agreement, held a ‘PPI tweets day’ on May 1 2014.
Throughout the day, messages were posted on Twitter about the issues related to payment protection insurance (PPI) that the FOS was handling. Details were given of customers who were self-employed when they took out PPI, who only worked eight hours per week, who were not resident in the UK, who were students at the time, or who felt pressured into taking out PPI.
At one stage, an FOS staff member said on the blog that they were explaining comparative redress to a “confused consumer”. Comparative redress involves the financial firm deciding that whilst single premium PPI was indeed unsuitable, that regular premium PPI would have been suitable instead. Consequently, the firm does not offer the customer a refund of all premiums paid, and instead offers a lower amount of compensation. Anyone who thinks this is an unfair way of resolving their case, and who thinks they deserve a full refund, can refer the firm’s decision to the FOS.
One interesting tweet concerned a customer who contacted the FOS on this day thinking she had PPI, when in fact she had card protection insurance from Card Protection Plan (CPP) Ltd. Customers of CPP do not need to submit a complaint in the usual way, as a formal redress scheme has been agreed by the regulator, the Financial Conduct Authority, and CPP and the major banks.
Other issues covered in the tweets were that the FOS can cater for customers whose first language is not English, and that they do chase up firms who have not responded to theri adjudications.
PPI remains a big issue for the FOS. Although numbers of PPI complaints were down by over 30% in the final quarter of 2013 – the last three month period for which figures are currently available – when compared to the previous three months, the figure of 79,578 complaints received in the period October to December is still significant. In the words of the FOS outreach officer Rupert Simpson, PPI has “industrialised” the FOS.
The initiative highlights that it is very much still possible to make a PPI complaint. The FOS will consider complaints concerning sales made in the last six years, or alternatively where it is no more than three years since the customer should reasonably have known there was a problem. Many PPI sales will not satisfy the first criterion, as most were sold before 2008. Yet most PPI complaints will still be admissible as a result of the way the second criterion is interpreted. Many people are still finding out that they were sold PPI without their knowledge, and even those who did know they had the insurance may not have realised how unsuitable it actually was.