The complication relating to mis-sold payment protection insurance policies is no longer restricted to Britain alone. This problem has spread to Ireland as well. The Bank of Ireland announced that it was setting aside close to €1m to pay around 1514 credit card customers who had become victim of the payment protection insurance mis-selling strategy of the banks. The selling strategies of the bank was being investigated by the Consumer Protection division of the Central Bank.
The office of the Financial Ombudsman Service is under severe pressure because of the drastic increase in the number of complaints relating to payment protection insurance policies. The office resolves disputes between financial institutions and customers that are not settled through in-house dispute resolution mechanisms. Out of approximately 150,000 complaints received in the first half of the year, close to 100,000 complaints are related to payment protection insurance alone. As compared to the second half of the previous year, there has been a 54% increase in the total number of complaints received by the office.
The market was shocked to discover that banks had to set aside £8 billion towards compensation of victims of mis-sold PPI policies. The shock and outrage is increasing as banks find themselves compelled to set aside more money again. The total provision is set to cross £10 billion. Websites providing information about PPI and mis-selling are beginning to highlight the latter figure in headlines, banners and advertisements. Continue reading
According to the FOS, 60% of all complaints received in 2011-12 were related to payment protection insurance. This is a big number considering the fact that the Financial Ombudsman received 264000 complaints in the year. The number of complaints received is a new record and bulk of complaints is related to sale of PPI and the financial consequences of the same. Continue reading