Thursday, June 26, 2008
PPIs under fire as M&S exits
Marks & Spencer is the latest high-profile lender to withdraw from offering payment protection insurance (PPI), which the Financial Ombudsman Service (FOS) says has attracted a sharp rise in complaints. Nationwide Building Society has also ended PPI offers.
The whole finance sector is under fire, with the FOS reporting a 30% rise in formal complaints to 123,089 in the ’07-’08 financial year, reversing a fall in the previous 12 months.
PPI complaints shot up to 10,652 from 1,832 the previous year.
The FOS said the overall rise was mainly due mainly to PPI and bank overdraft charges.
Marks & Spencer Financial Services, which pulled PPI in April, is part of HSBC, and the decision was in line with group policy.
HSBC is rethinking its strategy following criticism of the cost of PPI policies by the Financial Services Authority and consumer groups.
Lenders have been attacked for giving consumers quotations with PPI included.
Which? has said comprehensive cover is available more cheaply from independent providers.
An M&S spokeswoman said: “We are looking at alternative customers cover for a range of credit commitments.
In the meantime, we believe it is appropriate to stop offering PPI while we get feedback. Research shows that people want flexible cover for multiple credit responsibilities, and to protect their income.”
On its website, M&S advises customers to “consider your ability to maintain monthly repayments” and provides an internet address for more information.
The FOS says in its report that most complaints related to bank charges (nearly 32,000 in the first four months of the financial year) and credit cards.
A surge of PPI complaints followed internet and print media campaigns.
Which? says up to two million people may have been mis-sold PPI policies in the past five years.
“We were amazed to discover the scale of it,” said a spokesman. “Now is the time to fight back for people who think they might have been mis-sold PPIs.”
There were nearly ten times as many complaints relating to bank charges as in the whole previous year, reflecting a sharp rise in consumer discontent.
Last July the FOS stopped dealing with cases as part of a deal between the banks and the Office of Fair Trading.
Around 14,000 complaints about bank charges were frozen in the banking and legal system, as part of a plan to ask the High Court to resolve the legal issues involved.
DATED: 26.06.08
FEED: AM
The whole finance sector is under fire, with the FOS reporting a 30% rise in formal complaints to 123,089 in the ’07-’08 financial year, reversing a fall in the previous 12 months.
PPI complaints shot up to 10,652 from 1,832 the previous year.
The FOS said the overall rise was mainly due mainly to PPI and bank overdraft charges.
Marks & Spencer Financial Services, which pulled PPI in April, is part of HSBC, and the decision was in line with group policy.
HSBC is rethinking its strategy following criticism of the cost of PPI policies by the Financial Services Authority and consumer groups.
Lenders have been attacked for giving consumers quotations with PPI included.
Which? has said comprehensive cover is available more cheaply from independent providers.
An M&S spokeswoman said: “We are looking at alternative customers cover for a range of credit commitments.
In the meantime, we believe it is appropriate to stop offering PPI while we get feedback. Research shows that people want flexible cover for multiple credit responsibilities, and to protect their income.”
On its website, M&S advises customers to “consider your ability to maintain monthly repayments” and provides an internet address for more information.
The FOS says in its report that most complaints related to bank charges (nearly 32,000 in the first four months of the financial year) and credit cards.
A surge of PPI complaints followed internet and print media campaigns.
Which? says up to two million people may have been mis-sold PPI policies in the past five years.
“We were amazed to discover the scale of it,” said a spokesman. “Now is the time to fight back for people who think they might have been mis-sold PPIs.”
There were nearly ten times as many complaints relating to bank charges as in the whole previous year, reflecting a sharp rise in consumer discontent.
Last July the FOS stopped dealing with cases as part of a deal between the banks and the Office of Fair Trading.
Around 14,000 complaints about bank charges were frozen in the banking and legal system, as part of a plan to ask the High Court to resolve the legal issues involved.
DATED: 26.06.08
FEED: AM
