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LONDON (Alliance News) - Banks, credit card providers and personal loan companies have agreed to reassess more than 2.5 million payment protection insurance complaints from 2012 and 2013 which they may have either unfairly rejected or paid too little redress to, according to a UK regulator.
According to a statement published by the Financial Conduct Authority, firms have improved the way they handle PPI complaints, but it asked firms to reconsider the 2.5 million complaints after noticing a fall in the proportion being upheld. Following intervention the rates have now picked up, the FCA said.
"Making sure anybody previously mis-sold PPI is treated fairly now, and paid redress where its due, is an important step in rebuilding trust in financial institutions. In around two and a half million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again," FCA Chief Executive Martin Wheatley said in a statement.
PPI, which was sold to borrowers alongside credit products, was meant to help repay some or all of their borrowing if they lost their income due to illness or unemployment.
The FCA CEO said the process is now working well, with GBP16.0 billion put back into consumers' pockets since January 2011 when the regulator began to track payments.
"Given the enormity of this exercise it is no surprise that there have been some issues along the way but our approach is delivering a good result for consumers," Wheatley said.
The FCA's report shows that firms have now handled over 13 million PPI complaints since 2007. Seven out of 10 claims have been upheld in consumers' favour, the FCA said, adding that 3.2 million letters have already been sent to people who are likely to have been mis-sold PPI but have yet to complain, with a further 2 million to be sent in the coming months.
The regulator said it hopes to be able to scale down its PPI work in 2015 if the long term falling trend in PPI complaint volumes persists. A scale down would also require that firms continue to improve their PPI complaint handling and complete their mailings to those who are likely to have been mis-sold but not complained.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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