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FOS still to resolve PPI complaint after three years

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The Financial Ombudsman Service has yet to resolve a payment protection insurance complaint from 2008, over three years after it received the case.

Stephen Pattison and Katrina MacKay took out an £11,000 personal loan with Welcome Financial Services, which is shut to new business, in 2006. It was sold with PPI, life cover and a personal accident plan for an additional £2,868. Including a £235 acceptance fee, the total loan was £28,099 over 180 months at an APR of 20.41 per cent.

In April 2008, the clients complained to Welcome that the PPI and life cover were missold as the payments were spread over 15 years but the cover only lasted three and five years respectively. Welcome rejected the complaint in May 2008.

The clients referred the case to the FOS in September 2008. An adjudicator upheld the complaint and Welcome made what it described as a “goodwill gesture” which removed the cost of the cover but recalculated the loan at a higher APR of 21.8 per cent.

The clients asked the FOS if the recalculated loan was fair and the FOS decided to treat this as a separate complaint.

An adjudicator upheld the second complaint and Welcome appealed against the adjudication. In November 2010, the FOS said it would pass the case to an ombudsman for a formal decision.

In its most recent letter to the clients, sent in December, the FOS says it “may take more than a year” for an ombudsman to look at the case.

The clients say: “The length of time this has all taken is not fair on us and is not what we expected from the FOS.”

An FOS spokesman says the ombudsman is due to issue its final decision “within the next eight weeks”.

A spokesman for Cattles, which owns Welcome, says: “This matter is currently with the FOS awaiting a decision from an ombudsman.”

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Readers' comments (4)

  • The timescale is clearly unacceptable, but it is not untypical. FOS often call for a response in 14 days ... and then leave the file untouched for 14 weeks!

    If FOS focussed on the complaint to hand, rather than going on fishing trips looking for something which the customer did not complain about, they might move more quickly. However, fundamentally a bunch of amateurs have to spend a whole lot of time learning about things before they can pass judgement on them so the process will always be slow.

    It would also help if the FSA were to regulate the banks properly to cut the number of complaints that they generate.

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  • Personally, I think complaints are generally a good thing, as they give the opportunity for everyone to review how they've been treating people.
    However, you can see why some companies are turning down complaints they should uphold, knowing the complaint will then pass to the FOS and sit there for months, even years. I have a complaint which is now with the FOS, and it's now into the 2nd year of waiting for an answer.

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  • I have a complaint going through FOS regarding a home insurance complaint. Sent them a letter in June 2011 and despite it being a fairly simple case I still have no answer. They take weeks to respond and when they do they usually don't understand the basic details of the case. I would have to question their loyalty and ability.

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  • This complaint should have been forwarded to the FSCS by now. Welcome are no longer trading. If the client has an outstanding debt with Welcome they will not see any cash either. It will all go back onto the loan.

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