Lloyds Complaints Rise, ABI disagrees with FOS and BIBA unhappy with FSCS Levy

The biggest processor of PPI complaints in the UK (Lloyds bank) have reported an increase of 14% in complaint numbers over the second half of 2010.

In particular, PPI complaints jumped by a massive 69% to 148,300 as more customers became aware of the potential of PPI misselling. However, complaints about banking fell by 12% to 154,555, equating to 2.1 complaints for every 1,000 accounts from 2.4 in the first six months of 2010.

It is promising to see Lloyds complaints in other areas reducing. Although whilst consumer concerns focus on PPI misselling - there are still other areas which may rise once PPI matters ultimately reduce. In particular, complaints are rising about packaged account charges.

The ABI has hit out at the Ombudsman Service, questionning their suggestion to substantially increase their reserves – and thus the levy on firms. The ABI said "They (FOS) suggest the main reason for them wanting to do so is the impact that the banks’ judicial review of PPI complaints may cause. Yet the FSA has already confirmed that it expects the majority of PPI complaints to be dealt with by firms, so the FOS is unlikely to see a significant reduction in case income.”

Although the ABI do highlight the FSA's argument that most complaints should be dealt with by the relevant firm, the reality is that we find a substantial amount of cases being placed on hold as a direct consequence of the Judicial Review. Furthermore, with 4500 new cases being presented to the Ombudsman on a weekly basis, it is perhaps careless to suggest their reserves will remain consistently high over the next 6-12 months.

Finally, the British Insurance Brokers Association (BIBA) have added to the furore about levy increases at the FSCS. They say the current FSCS funding model is unfair to the industry and have created template letters to send to local MPs in the hope that they in turn will encourage the Financial Services Authority to "proceed urgently with consulting on a revised model".

This reflects other similar calls to the FSCS over the last few weeks from other bodies. The levy on firms who have never sold PPI could be viewed to be unfair, but an alternative could be equally as unfair on another section of FSA regulated firms. Hopefully, the FSCS will arrive at a reasonable consensus with the industry.

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