Natwest / RBS fined and Ombudsman continues to struggle

Some statistics were issued last week by the Ombudsman in relation to their ongoing PPI complaint caseload. They have highlighted an unexpected surge in PPI complaints, not captured by their 2010 annual review. The Ombudsman expects to receive 68,000 complaints which is well above the 46,000 cases for which it budgeted. As a result, the Ombudsman expects to resolve a total of 180,000 cases during the current financial year, almost 15% down on the 210,000 it originally predicted.

The Ombudsman confirmed the high volume of PPI cases has contributed to a drop in its income (80% of which comes from case fees) because it has resolved fewer disputes as a result. Furthermore, they confirmed their reserves had been "significantly" reduced after the 40% jump in the number of PPI complaints. As a result it is expected to increase the industry levy as its reserves would be exhausted within six weeks if firms decided to stop co-operating on payment protection insurance complaints.

It was always clear FOS would be significantly backlogged with the amount of cases it had to deal with. It has no option but to investigate those claims in accordance with its statutory obligations, but the amount of Judicial Review based cases is clearly the main reason for its troubles.

Additionally last week, the FSA has fined Royal Bank of Scotland and its parent bank NatWest £2.8m for multiple failings in the way the banks have handled customers' complaints. The investigation and subsequent fine was NOT confined to PPI complaints - but to other complaints the bank investigated. We have noticed some particular failings with Natwest group on the way it deals with PPI complaints (most notably going over the 8 week timeframe to investigate cases and making poor offers of compensation). Hopefully, we will see further sanctions and fines bestowed upon the group for its dealings in PPI complaints.

If you think you have been mis-sold a Payment Protection Insurance policy, do not hesitate to contact us via www.ppireturn.co.uk.