Almost 50,000 people complained to the Financial Ombudsman Service about payment protection insurance providers last year. The news come shortly after the Competition Commission announced a major restriction on the way such cover is sold.
The FOS said payment protection was by far the biggest problem among consumers, making up 30% of all complaints over financial products. The next-biggest problem, current accounts, was responsible for barely half as many complaints.
Complaints over PPI are dealt with on a case-by-case basis as there is currently no blanket policy on what counts as unfair behavior by sellers. The FOS also noted that that consumers can contact them directly without using a third party. Two-thirds of complaints about PPI last year came through claims management companies which charge a fee.
The Competition Commission is to ban financial companies from selling PPI alongside products such as loans, credit cards and mortgages. It believes such sales leave customers less likely to both consider whether they need PPI and to shop around for a better deal from other insurance providers.
One exception to the new rules is retail PPI: protection sold to cover repayments for goods and services bought on store credit. The commission will further investigate this sector before imposing tighter controls.
