Payment protection cover becomes most unpopular insurance product
The Financial Ombudsman Service (FOS) received a record number of complaints about payment protection insurance (PPI) last month, making it the most unpopular insurance product.
The FOS received 1,499 complaints about the cover in January, compared with 1,832 on the same issue during the whole of the 2006/2007 financial year.
It said it had seen a steady increase in the number of complaints it received about PPI since the beginning of this financial year, and the cover was now the most complained about insurance product.
About 80% of the complaints it looked at were being upheld – more than double the average of between 33% and 40% for the insurance sector .
An FOS spokesman said: “The number [of complaints about PPI] is increasing month-on-month.
“The fact that so many complaints are being upheld suggests that firms aren’t doing enough to deal with these complaints before they come to us.”
The Competition Commission is currently conducting an investigation into the PPI market.
The FSA is carrying out work to improve sales practices amid criticisms in recent years PPI that is overpriced and being mis-sold to people who would never be able to claim on it.
Other complaints included customers who alleged they were not given a choice about buying the product, and consumers being sold policies they would not be able to claim on.
The FOS spokesman added: “It bears comparison with the early days of endowment policy complaints, where firms were simply turning complaints down and leaving it to the ombudsman to deal with.”