The proportion of payment protection insurance (PPI) complaints being resolved in the consumer’s favour has declined.
The number of complaints about payment protection insurance rose by 10pc in the final three months of 2011 to 55,907, according to the Financial Ombudsman Service.
But the FOS said just under seven out of 10 (68pc) of PPI complaints cases were settled in the consumer’s favour in the period, compared with more than nine out of 10 (92pc) between July and September.
The typical compensation paid is £2,750, but the figure can “vary considerably” and run into tens of thousands of pounds in some cases, the ombudsman said.
The FOS pointed out that the previous spike of 92pc of complaints going the consumer’s way came shortly after a legal challenge to PPI complaints was dropped. The figure includes cases in which businesses have decided to settle in the consumer’s favour once FOS proceedings have started, as well as complaints that the FOS has upheld itself.
In December it emerged that more than £1bn was paid in the first 10 months of last year to customers complaining that they had been mis-sold PPI. The compensation was paid by 16 unnamed firms, accounting for 92pc of PPI complaints in the first half of 2011.
Consumers took out PPI to help repay their loans if they fell ill for a long period or became unemployed, but a widespread mis-selling scandal emerged.
Some customers found they had taken out the policy without realising they did not have to have it or felt pressured into doing so. The banking industry dropped its legal challenge in May over whether new rules on PPI mis-selling claims could be applied retrospectively.
The move meant more than three million people were in line for compensation, expected to result in an overall bill of between £7bn and £9bn. The FOS said feedback suggests it will continue to receive “substantial” volumes of PPI complaints for “another two or three years”.
The body also said that around eight out of 10 PPI complaints it receives have been brought by claims management companies, and emphasised to consumers that there is no need to pay a third party to make a complaint.
*reported by telegraph.co.uk*