92pc of Insurance Complaints Paid by Firms During 1st Half of 2011
A total of 16 firms, or 92 percent of PPI complaints received in the first half of 2011, have paid a total of £215 million in redress between January and June 2011 inclusive, while the remaining eight per cent consists of approximately 400 other firms.
The Financial Services Authority (FSA) has published details of the amount of redress paid by firms during the first six months of 2011 to consumers who have complained about the way they were sold payment protection insurance (PPI).
In June 2011, the FSA extended the time periods that such as Barclays, Lloyds Banking Group and RBS have to deal with their backlog of stayed PPI complaints, to ensure that these banks could handle the PPI complaints properly, thus putting the arrangements in place. The extension also covers the high volume of new complaints on PPI.
“We expect the number of complaints handled by all firms to vary over the coming months as they seek to clear their backlog and deal with new complaints. Consequently, the amount paid by firms each month may go up or down,” the FSA said.
In May and June alone, £102 million was paid out after the dismissal of the industry’s legal challenge to the FSA and the Financial Ombudsman Service (the Ombudsman).
The monthly totals, with cumulative totals in brackets, are January – £29 million (£29 million); February – £31 million (£60 million); March – £28 million (£88 million); April – £25 million (£113 million); May – £37 million (£150 million); and June – £65 million (£215 million).
The figures are inclusive of the value of ex-gratia payments made to complainants and cases settled by the Ombudsman.
The FSA noted a big increase in redress in May and June following the High Court’s decision to reject the legal challenge to its PPI complaints handling measures.
“The FSA is publishing this data as a simple measure to allow firms, consumers and other interested parties to keep track of the progress being made,” the regulators said in a statement.
“The FSA will continue to publish this data on an ongoing monthly basis accompanied by a running total.”
The FSA has also created a step by step video guide featuring the FSA’s head of consumer affairs, Chris Pond, who explains the process of how to complain to financial services providers.
Margaret Cole, interim managing director of the FSA’s conduct business unit, commented: “The treatment of PPI complainants has left an indelible stain on the financial industry’s record. By releasing these figures we’re providing a useful measure of firms’ progress that can be tracked on an ongoing basis.
“While the amount of redress paid in May and June is unsurprisingly large in the wake of the judicial review, looking ahead we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints as well.
“We remain 100 per cent committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly. Where we find that this not to be the case, we are not afraid to take tough action.”