Millions of lost income reported by PPI providers

The Financial Ombudsman Service (FOS) will report that complaints about payment protection insurance tripled to more than 30,000 in the 2008-9 financial year, when it publishes its annual review this month, The FT reports

PPI complaints account for a quarter of the FOS’s work, yet the FOS only sees the 5% of complaints not resolved by the banks and insurers. “.

Lost income

In a separate story the FT says the lost PPI income to some banks and insurers is huge, with Lloyds, Royal Bank of Scotland (RBS) and Aviva hit by the Competition Commission and the Financial Services Authority’s reforms.

Cuts in income include:

  • Lloyds £300m
  • Aviva £78m
  • RBS also said the withdrawal had helped drive down first quarter non-interest income.

Next year, the Competition Commission will ban lenders from offering PPI when a consumer takes out credit, forcing borrowers to shop around. Lloyds is supporting an appeal by Barclays against this ban.