The number of complaints about mis-selling of payment protection insurance is still on the rise. But regulators say they firms are holding up their work in resolving the complaints.
PPI is an insurance scheme taken out alongside a credit agreement such as a credit card or mortgage, designed to cover the risk of the borrower losing their job. While the principle of the insurance itself is sound, there have been widespread complaints of firms either pressuring people into buying such policies at high premium rates, or misleading customers about the extent of the protection offered and the limitations of a policy.
Such mis-selling is now consistently the most complained about topic at the Financial Ombudsman Service, which recorded 24,995 such complaints in the last three months of 2010, a new record.
However, the British Bankers Association is currently bringing a judicial review into how the FOS and its parent organization should handle such complaints. According to the FOS that's led to some major lenders refusing to respond to complaints until the case is settled.