One of the 12 has been referred to the regulator’s enforcement division

The Financial Conduct Authority (FCA) has published the findings of its thematic review into payment protection insurance (PPI) complaints handling, Payment Protection insurance complaints: Report on the fairness of medium-sized firms’ decisions and redress.

The regulator has referred one firm to its enforcement division as a result of the findings, with a total of 12 out of 18 companies causing the FCA concern.

Of the 12 firms that the FCA highlighted as needing improvement, the regulator disagreed with 59% (295) of the complaints rejected by the firms and 43% (57) of the redress amounts given to customers whose complaints were upheld.

The report said the firms “did not display a genuinely holistic approach” and cited five main shortcomings in their approach to PPI complaints handling:

  1. Overlooking the inadequate demands and needs assessment that took place at the time of sale in an advised sale.
  2. Overlooking the inadequate assessment in an advised sale of whether a single premium policy would meet the customer’s demands and needs.
  3. Paying insufficient regard to poor disclosure of the limitations and exclusions of a policy at the time of sale.
  4. Not identifying poor disclosure of the cost of a policy at the time of sale.
  5. Providing inadequate explanations of complaint decisions and redress offers.

FCA director of supervision Clive Adamson said: “PPI has developed into the biggest issue of financial mis-selling in recent years, and has significantly damaged public trust in financial institutions.

“Ensuring that firms put things right by handling PPI complaints fairly is vital to bringing closure to the issue and rebuilding public confidence, and is a priority for the FCA.”

The review found that the remaining six firms, which accounted for 10% of complaints between 2010 and 2012, were “mainly delivering fair outcomes” and disagreed with only 13 of the 168 rejected complaints and 33 of the 155 redress amounts.

However, it did note that there was still “some scope” for improvements to the quality and clarity of responses sent to customers.