The FSA announced on Friday a temporary rule to give customers who recently made a complaint about their purchase of a Payment Protection Insurance (PPI) policy more time in which to refer their complaint to the Financial Ombudsman Service.
The regulator has stated that the temporary rule, which suspends the existing six month time limit for referring complaints to the Ombudsman, is now in effect and will run for five months, until 27 October 2010.
In the 2009-2010 annual review from the Ombudsman PPI complaints accounted for three out of every ten new cases referred to the ombudsman service – a 58% increase on the previous year, following a three-fold increase in the year before that.
This shocking rise in complaints has been attributed to the FSA ordering firms to reopen previously dismissed cases last September.
PPI is meant to help people who are unexpectedly unable to pay back previous personal debt, due to unforeseen personal circumstances such as unemployment or illness, however mis-selling of expensive PPI policies has been rife in recent times, with lenders given huge fines by the FSA for point-of-sale PPI selling tactics, including telling borrowers that the, sometimes unnecessary, cover was “compulsory”.
The rule applies to recent PPI complainants who have already been sent a final response from a firm between the dates of 28 November 2009 and 28 April 2010.
This action has been taken to ensure recent PPI complainants are not disadvantaged by running out of time to refer their complaint to the Ombudsman while the FSA works to resolve a long term solution to ensure customers are treated consistently and fairly when complaining about the sale of a PPI policy, or when buying a new one.
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