Call for action on PPI complaints

The City watchdog has been urged to take action over the way payment protection insurance (PPI) is sold after a 10-fold rise in complaints.

The controversial product is the subject of more than 500 complaints a week received by the Financial Ombudsman Service (FOS), making it the single biggest issue consumers contacted the service about.

The FOS has now written to the Financial Services Authority about the issue after the "significant proportion" of complaints being upheld made it think there was "widespread consumer detriment".

"PPI complaints have risen 10-fold in the past two years, and are now 25% of all the complaints we get," a spokesman for the FOS said.

PPI covers debt repayments if the holder is unable to work or loses their job. It has come in for heavy criticism in recent years following claims that it is overpriced and often mis-sold to people who will never be able to claim on it.

The complaints received by the FOS typically relate to people thinking they have been mis-sold a product, which is unusual for complaints relating to insurance products, the ombudsman said.

Copyright © PA Business 2008

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