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PPI complaints to FOS top 25,000

Walter Merricks, chief ombudsman at the Financial Ombudsman Service says it has received over 25,000 complaints relating to the sale of payment protection insurance since January 2008.

Complaints about credit-card charges came to almost 10,000.

These two areas are now its largest categories of complaints – together out-numbering the 30,000 complaints it received last year about the single issue of bank charges.

Merricks says: “So it looks as if responding to large-scale surges in complaints driven by ‘single-issue’ consumer campaigns is now becoming a regular feature of our workload.”

He says traditionally the ombudsman’s role was seen as dealing with individual disputes relating to one-off issues.

But he says: “The ombudsman’s office was regarded as a kind of craftsman’s workshop – not a factory for mass-production. So some eyebrows may be raised at the idea of the ombudsman service now handling a workload involving thousands of similar complaints, all involving the same financial product or problem.

“But while some may question whether handling such surges of ‘single-issue’ complaints is proper work for the ombudsman, there is little consensus on what the answer might be for these disputes.”

He says the ideal solution would be for all financial businesses to treat their customers fairly and to put things right when they go wrong, either because businesses recognise this is the right thing to do, or because of effective regulatory scrutiny.

He adds: “Where this does not happen, and a single issue arises that directly affects very large numbers of consumers, it would surely best be resolved collectively – rather than relying on individual consumers each having to make their own separate complaint. If there has been widespread consumer detriment, widespread redress is needed.”

As a result he says the ombudsman may continue to be faced with mass surges of these single-issue complaints – which it will have no option but to deal with.
He says: “The actions we necessarily have to take, in order to address the complaints, may result in our being accused of acting as a surrogate regulator – but that may be inescapable.

“We can and do liaise with regulators, of course – both informally, and officially through the ‘wider implications’ process. But consumers rightly expect to have their complaints resolved, one way or another.

“We need to ensure that none of this distracts us from our central purpose of underpinning confidence in financial services for the benefit of consumers and the financial services industry – a function needed now more than ever.”

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