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ombudsman news

issue 93

April / May 2011

PPI - a way forward?

I am sure that, by now, every reader of Ombudsman news will have heard about the High Court's judgment on the handling of consumer complaints about payment protection insurance (PPI).

In a very clear ruling issued on 20 April, Mr Justice Ouseley rejected, on all counts, the legal challenge on the approach to handling PPI complaints, brought against the Financial Ombudsman Service and the FSA by the British Bankers Association (BBA) - on behalf of a number of high-street banks.

This High Court ruling means that financial businesses should now be following the FSA's rules, which require them to investigate their customers' PPI complaints properly and fairly. The ruling also means that businesses should be working constructively with the ombudsman service to resolve those complaints that they cannot sort out directly with consumers.

The PPI complaints workload has been the biggest challenge the ombudsman service has faced over the last year. In the last twelve months we have received over 100,000 new complaints alleging mis-selling of PPI - more than half of our total caseload and more than double the number of PPI cases we received in the previous year.

The approach taken by the businesses involved in this legal action has meant that we have not been able to resolve as many of these cases as we would have hoped. This has led to delays, uncertainty and frustration for the consumers involved - large numbers of whom have seen little or no progress on their PPI complaints for many months.

As an organisation that aims to provide a good customer service, we have not enjoyed having to explain these significant delays to large numbers of our customers.

This is why - now we have a clear-cut ruling from the High Court - we all need to work together to resolve these complaints as quickly as possible. It will greatly benefit all of our reputations to do so.

Natalie Ceeney
chief executive and chief ombudsman

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.