Five million more PPI claims to come

Robyn Hall

October 23, 2013

Natalie Ceeney, chief ombudsman at the Financial Ombudsman Service, was recently reported as suggesting that complaints about the mis-selling of insurance on loans and mortgages may have peaked.

That suggestion came on the back of a reduction in complaints landing in the FOS office from 3,000 each working day to around 2,000.

But the bulk of complaints that reach FOS are still PPI complaints; about two-thirds of its workload.

Writing on the PFCA website chairman Nick Baxter says: “To assess if complaints to FOS have really peaked one needs to assess the current position in respect of PPI mis-selling claims.”

The final redress figure is forecast to be close to £25bn and less than half this has been paid out so far.

The FOS two thousand complaints per working day works out around a quarter of a million complaints every six months.

But FCA figures show that there were 1,786,626 new PPI “complaints opened” between January 2013 and June 2013. That’s around 13,500 per working day.

Baxter says: “So while more complaints may be settled without the assistance of FOS the volume of PPI complaints is not significantly declining and nor will it in the short term.”

And he adds: “If the £25bn suggested total compensation bill is accurate and no one seems to dispute the figure and if, as appears to be correct, only half of it has been paid out so far this leaves another £12bn to be repaid.

“Research which I have undertaken show that an average PPI redress figure is around £2,400 per case, which means that there is some five million claims yet to surface.”

Economists say cash from PPI compensation is likely to be one of the drivers behind the recovery in the UK.

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