The Financial Ombudsman Service has urged for the mis-selling of payment protection insurance policies to be cracked down upon after they revealed they received 500 complaints relating to this issue alone in a week.
They have expressed their concerns that the financial industry is not tackling the problems relating to the mis-selling of the products and have written to the Financial Services Authority to prompt further investigation.
The Ombudsman said complaints against Mis-Sold PPI policies has risen dramatically in the past two years and now accounts for a quarter of the problems brought before it, with many people now making Payment Protection Insurance Claims against their policies.
Back in June, the Competition Commission called for a clampdown on the sale of these products after they discovered that millions had been inappropriately sold, or added to loans without customers expressed consent.
This product was traditionally sold alongside the likes of mortgages or personal loans, with the intention to cover the minimum payments should the borrower be unable to do so, due to circumstances such as redundancy.
However many experts now believe that over two million people have been Mis-Sold PPI over the past five years, with many not entitled to claim if required due to their personal circumstances not being appropriate for the cover provided.
The Financial Ombudsman Service’s letter to the Financial Services Authority will be considered at a board meeting later this month, with the FOS’s main concerns being that the mis-selling of the product has been widespread and that many people who have been paying for a policy are either unaware that they are, or not fully know their rights if they need to make a claim.
Along with this, Consumer Organisation “Which?” has published that over one million people who bought a PPI policy did so as they believed it was compulsory with a credit card.
As a result of the FOS, an industry wide review of the selling of this product could begin.
