FOS still to resolve PPI complaint after three years

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.”