PPI Claims to FOS Continue to Rise
The payment protection insurance debacle has turned out to be the largest financial scandal in the last century. Millions of claims have been filed with the Financial Ombudsman Service over the past several years. The FOS claims that the number of new cases has risen sharply over the past year.
PPI Crises Continues to Grow
More than 2 million financial cases were filed in 2012. That is an increase of 92% over the previous year. Nearly 380,000 of those cases were related to payment protection insurance missellings.
The FOS said that claims have continued to rise in recent months. Many of the claimants turned to the FOS after their claims were rejected by the banks. The FOS has addressed its concerns with the Financial Services Authority and Parliament, but the banks have failed to reform their claims handling policies.
Reasons for the Crisis
There are several reasons why more claims are being filed. These figures will probably continue to increase until these underlying problems are addressed.
The banks have become increasingly reluctant to uphold claims in recent years. The number of cases that the banks upheld has dropped from 84% to 70% since 2012. This is most likely because executives of the High Street banks are under pressure to reverse losses the banks have experienced over the last couple of years.
Cases have nearly doubled since the banks began rejecting more claims. An undercover reporter from the Times worked at a claims firm where he was told to reject claims that may have resulted from unscrupulous sales tactics.
Many customers are also filing claims in response to financial difficulties they are facing. The United Kingdom entered a triple dip recession earlier this year. Many households are struggling for ways to raise money to pay their mortgages and other bills. Filing PPI claims seems more appealing to these families than it did when the economic recovery was more robust.
What Will Happen in the Coming Year?
Many customers have started working with PPI claims companies to seek restitution from the banks. The number of claims companies has surged in recent years because many customers feel more comfortable working with them rather than filing a claim themselves.
Many experts predict that customers will file another record number of PPI claims this year. They hope that the banks will finally reform their policies to remove some of the burden from the FOS.