Complaints about payment protection insurance created a significant spike in the number of complaints made to financial services firms in the second half of 2017, according to recent figures published by the U.K. Financial Conduct Authority.
During the second half of 2017, 3.76 million complaints were received by 3,072 firms, which is a 13 percent increase compared with the first half of the year, when 3.34 million complaints were received, according to the FCA figures. Most (98 percent) of the 3.76 million complaints were received by 222 firms that received at least 500 complaints each.
Payment protection insurance (PPI) complaints were the main driver of this spike, rising to their highest level in more than four years. In the second half of 2017, 1.5 million PPI complaints were received, compared to 1.1 million in the first half of the year. Almost half (49 percent) of these PPI-related complaints related to advising, selling, and arranging issues.
The spike in PPI complaints follows the launch of the FCA’s media campaign in 2017 to raise awareness among U.K. financial services customers about the deadline for waging complaints about the sale of PPI in response to the ongoing PPI scandal.
PPI has been sold alongside mortgages, credit cards, and other unsecured loans since the 1990s, intended to cover repayments in certain circumstances in which customers couldn’t make those payments themselves. Then the FCA found out that PPI was often mis-sold.
“We are continuing to monitor and challenge all firms to ensure they maintain the expected standards and are delivering on their commitments to make it easy for people to complain about PPI,” said Christopher Woolard, executive director of strategy and competition at the FCA. “When PPI is taken out of the mix, the numbers of complaints firms are receiving has remained stable. Firms should be doing all they can to reduce complaints and ensure they are treating customers fairly.”
Excluding PPI, 2.2 million complaints were received by firms in the second half of 2017, which is about 13,000 fewer than the number received in the first quarter.
After PPI, “current accounts” caused the second-highest number of complaints, coming in at 509,047, followed by credit cards, with 314,586 complaints. Further firm-level data is available on the FCA’s downloadable tables.
According to FCA data, the amount of redress paid out in total during the second half of 2017 was £2.36 billion (U.S. $3.29B), a 19 percent increase compared to £1.99 in the first quarter. This was driven by an increase in redress payments for PPI complaints, which increased by 26 percent to £2.05 billion; of this, £2.01 billion was paid out for PPI complaints that were upheld. Average redress paid for each PPI complaint upheld in the second half of 2017 was just under £2,100, compared to just over £2,500 in the first quarter.
Customers have until Aug. 29, 2019 to wage a PPI complaint with the FCA.