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PPI confusion drives FOS protection complaints

Complaints to the FOS about life cover, critical illness and income protection have jumped over the past nine months as increasing numbers of con­sumers confused their protection plans with missold payment protection insurance.

The latest FOS complaints data shows a total of 244,873 PPI complaints between April and December 2012, up 132 per cent from 105,585 during the same period in 2011. Some 62 per cent of complaints were upheld.

Term assurance complaints jumped 143 per cent to 2,166 in the same period, compared to 890 in 2011.

Whole-of-life cover complaints rose 26 per cent from 1,508 to 1,893, while critical illness complaints increased by 80 per cent from 559 to 1,008.

Income protection complaints went up by 68 per cent for the nine-month period, from 617 to 1,038.

Although protection complaints have increased, the uphold rates are lower than for PPI complaints. The FOS upheld 13 per cent of term assurance complaints for the nine-month period, as well as 24 per cent of whole-of-life complaints, 21 per cent of CI complaints and 28 per cent of IP complaints.

A FOS spokesman says: “The truth is a lot of these policies are not being missold, but simply confused with PPI.”

London & Country sales director Michael Aldridge says: “PPI has spawned a complaints culture which is driving these complaints, though it is good to see the low uphold rates. Advisers need to take time to explain the different features of PPI and other protection products.”


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