Penalty will apply to companies with more than 25 cases

The Financial Ombudsman Service (FOS) is planning to introduce a £350 surcharge for each case of mis-sold payment protection insurance (PPI).

If implemented, the charge will apply to companies that have more than 25 cases. It will come on top of an existing £500-per-case charge.

The charge is being proposed to cope with the costs of handling the rising number of PPI mis-selling cases. The FOS reported in a newsletter in November that it had started receiving 3,000 new complaints a week.

Large banks, including Lloyds, The Royal Bank of Scotland and Santander, last year set aside billions of pounds to compensate disgruntled PPI customers.

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