The Financial Ombudsman Service (FOS) has once again been inundated with more claims for mis-sold payment protection insurance (PPI).
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The fresh surge in complaints means that the total number of cases going to the FOS has increased dramatically.
The financial watchdog received 55,907 complaints in the last three months of 2011, which is up by 10% on the previous quarter.
To make matters worse for the FOS, this figure is likely to rise well into 2012 and 2013.
The FOS is now making rulings on complaints that banks and lenders have failed to resolve. This could involve charging an additional £350 for each case sent to them for banks and lenders who have passed on over 25 PPI claims.
As a result of this mass PPI scandal, 54% of the FOS workload now involves handling fresh PPI complaints. This represents far more than any other type of problem the ombudsman deals with.
Payment protection insurance has been widely mis-sold on the back of financial products such as loans, credit cards and car finance. It is typically designed to make repayments on these products if the borrower becomes unemployed or ill.
Whilst the product itself can be very useful, it was sold in such a way which has shrouded PPI in controversy.
After years of campaigning against the way it was sold, consumer groups and investigations by regulatory bodies found that banks and lenders had sold the insurance policy to people who did not need them or were ineligible to claim using them.
Since the scandal has gathered pace, millions of people have been claiming for compensation. In some cases people have been mis-sold more than one policy and are entitled to multiple payouts.
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