Despite warnings from the Financial Service Authority, there are signs that the PPI crisis may be finally starting to peak. The Financial Ombudsman said complaints for most of the High Street banks started to drop. However, the FOS is still receiving at least 1,000 claims a day. The Ombudsman believes that the PPI crisis will continue into the foreseeable future.
There was a steep drop in PPI claims during the second half of 2013. On the surface, it would appear that the crisis was finally starting to be resolved. However, the FOS said that complaints are still near record highs.
More PPI claims were filed in 2013 than any other year since the crisis unfolded. The surge began at the beginning of the year and slowly began to taper off in the last six months. However, claims are still near record highs even after falling towards the end of the year.
The FOS expects that the PPI crisis will continue into the foreseeable future. Natalie Ceeney, the former chief ombudsman, believed that claims would continue to increase indefinitely. Her successor Tony Boorman, said that there are signs that it may finally be starting to taper off.
Boorman said that these signs are encouraging news for everybody. However, he also said that it will take a long time before the PPI crisis is resolved.
PPI complaints are declining for some banks, which suggests that the banks have improved their practices. However, claims remain elevated with some banks.
Boorman said that claims haven’t fallen with MBNA or HSBC. They have started to drop at most other banks, but are still unacceptably high. Lloyds, the Bank of Scotland and Barclays account for the majority of PPI claims.
While PPI complaints are still near record highs for most banks, some complaints are more valid than others. The FOS said that over three quarters of the complaints made against Barclays have been upheld. However, only about 10% of the complaints made against the National Building Society were.
The rate of claims being upheld is declining for many banks, which shows that many of the legitimate claims have already been resolved. However, the FOS believes that there is still a substantial number of claims that haven’t been filed. They may face another surge in claims in the future.
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