PFCA calls for greater scrutiny of FOS cases

According to PFCA, the recent FCA financial penalty (£117,430,600) levied against Lloyds Bank Group highlights the fact that genuine PPI claims are still being rejected, and that this remains a significant industry problem.  

FOS information shows that in the six month period ending December 2012, 60% of all PPI claims adjudicated by the service in that period were upheld in favour of the consumer. The industry managed only a slight improvement in the six month period ending December 2014 (57%).

FOS uphold data highlights the fact that some product providers are worse than others when it comes to rejecting genuine claims, showing high level uphold percentages and/or no improvement overtime within some financial institutions including HSBC and Lloyds Banking Group.

PFCA is now highlighting the wider implications of the inappropriate rejection of genuine cases, explaining:

"Where a case is wrongly rejected, it is usually referred to FOS, which can’t cope with genuine disputes, let alone having to administer cases which should have been paid out without referral."

FOS has confirmed that “people are waiting longer for our answer than they – or we – feel is acceptable”.

PFCA data shows that of the claims referred to FOS by PFCA member firms, 69% have been at FOS more than six months (resolving disputes within this period should be a reasonable goal) and the 41% have been at FOS over a year. The most recent FOS annual report shows that around 250,000 PPI complainants are waiting for a FOS decision.

The PFCA is urging the FCA to take further steps and issue renewed guidance focusing on the scrutiny of PPI complaint handling and, in particular, rejection processes. Independent ‘skilled person reviews’, such as the one used in the FCA Lloyds decision notice, should become industry norm giving regular oversight and helping to rebuild consumer trust.