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FOS warns firms over rise in complaints for PPI-style products

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The Financial Ombudsman Service has warned firms to “learn lessons” from payment protection insurance misselling after seeing a rise in complaints for new PPI-style protection products.

In its monthly ombudsman newsletter, published today, the FOS says firms are selling products that are difficult to distinguish from PPI, leaving customers confused.

It states: “Over the last couple of years, we have seen more cases involving different ‘payment protection products’.

“Although we haven’t seen the widespread problems we have seen with PPI, we have received a number of complaints about these products that have raised similar issues – for example, whether a business provided advice about the product with reasonable care and skill, or whether it gave the consumer information in a way that was clear and not misleading.”

FOS says the volume of complaints about non-PPI products is very small compared to PPI, but firms should be careful.

It states: “In the cases consumers refer to us, we expect financial businesses to have shown that they have learned the lessons of PPI in the way they marketed and sold these products and, of course, in the way they handled complaints if something had gone wrong.”

The FSA and Office of Fair Trading recently published joint guidance for businesses for selling new payment protection products.

FOS also hits out at claims management companies for failing to identify the right products and causing “unnecessary confusion, delay and frustration” on all sides.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. “FOS also hits out at claims management companies for failing to identify the right products and causing “unnecessary confusion, delay and frustration” on all sides.”

    They may have hit out, but they have absolutely no power to do anything about this.

    Helen Grant, the Justice Minister, stated the other day that she did not agree with any barriers to CMCs in case it stopped consumers complaining.

    From what I have seen and read, many CMCs often deliberately put in claims pretending to be lump-sum PPI when they are not. This, in my opinion, is fraudulent and should be the subject of police action. This would not stop genuine claimants at all, but would dissolve the FOS backlog quickly and enable them to address honest complaints.

  2. Sounds like the FOS staff are seeing a gradual fall in PPI claims and are stirring up another scandal to keep their jobs
    Remember they took on extra staff who otherwise would be back on the street looking for a proper job

  3. I can see a FOS advertising campaign on the horizon… Seems like they are positioning for some extra business to fill the gap when PPI claims start drying up.
    They are a business after all!

  4. I have personal experience of a bank denying I’d ever had PPI, but then a Claims company got involved and I won my case. Go figure

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