Ombudsman reports: Payment Protection Insurance complaints skyrocket

Being careful about getting a PPI is a smart financial move

10:59 22 July 2013

The FOS (Financial Ombudsman Service) reported that the PPI cases for the first quarter of 2013 exceeded the total number of cases in 2011 and 2010 combined. The Ombudsman received a total of 132,152 complaints regarding mis-sold PPIs in a period of 3 months (April to June) in 2013. The FOS also reported that it continues to receive at least 2000 new complaints daily.

Although this news lowered consumer confidence, it is not bad enough to recommend keeping away from PPIs. Being careful and smart will help you go a long way. To elaborate, here are three important tips for people who plan to acquire a PPI in 2013:

1. Decide whether there is a need for a PPI - Unlike some individuals, most people don’t need PPI. One deciding factor to need this kind of insurance is having significantly large financial transactions with a bank. It is also best to first consult an independent financial expert in order to shed some light into what advantage PPI would bring. Consulting an expert would definitely allow people to weigh out factors whilst getting this insurance and end up filing for a mis-sold PPI claim.

2. Ignore the “Sales talk” - Most banks would talk people into getting this kind of insurance. Without them knowing it, people are already signing a PPI contract. Of course a bank’s goal is to make profits and selling PPIs is a very profitable business undertaking. But first ignore all the “sales talk” and consider the tip #1 before giving a bank a chance to talk.

3. There are PPI handlers - This last tip is for people who decided to go for this type of insurance. Most people don’t know that PPI handlers exist. They are the ones who are experts in making PPI claims. Although it would add another set of fees to hire a handler, it is better than not getting a refund at all.