The Financial Ombudsman Service is handling around 3,000 new cases a week related to the alleged mis-selling of personal protection insurance (PPI), almost a decade after the financial crash.
Caroline Wayman, the chief financial ombudsman, said that the numbers of people who could still come forward to complain about PPI is “pretty enormous”.
It’s estimated by the Financial Conduct Authority (FCA) that 45m PPI policies were sold between 1990 and 2010, worth £44bn in premiums. Some people were sold multiple PPI policies.
From April to December 2016, the financial ombudsman service received 121,557 new complaints on PPI, and upheld around 54 per cent of them.
For the same period in 2015, the ombudsman received 141,366 new PPI complaints, upholding 70 per cent of them.
Another area of concern is the rising number of complaints related to payday lenders. From April to December 2016, the ombudsman received 7,810 new complaints about payday lenders, compared with just 1,669 new complaints for the same period in 2015.
Ms Wayman told The Yorkshire Post: “We’re getting around about 3,000 (PPI cases) a week still, so that’s still significant numbers. At its height, we were getting about 12,000 a week, which is absolutely unprecedented.
“Being able to forecast our PPI caseload is particularly challenging because there are so many uncertainties for the year ahead.”
She added: “The pool of potential people to come forward is still pretty enormous.”
Over the last decade, the financial ombudsman has received around 1.6m new complaints about PPI.
Ms Wayman said she took the view that if more than a third of complaints were upheld “something is going on that isn’t quite right”.
In December, the FCA said it will make a further announcement in the first quarter of this year with regards to deadlines for making PPI complaints.
“Our biggest growing area this year has been payday lending,’’ Ms Wayman said. “We think it’s at least in part about the fact that some payday lenders have been required by the FCA to go back and compensate customers.
“We’ve done a lot of work to try and increase awareness amongst consumers that the ombudsman is a place you can come to if you’ve got a payday lending issue.
“Quite typically, the people we see, they haven’t just got a single payday loan, very often they’ve got 10 to 12 payday loans.”
Ms Wayman said she wanted to encourage small firms with 10 employees or less, and turnover of less than 2m euros, to come to the ombudsman if they believed they had not been treated unfairly by the banks.
“For the ombudsman, you just need to tell us your story in your own words and we can do the rest,’’ she said.
Last month, Andrew Bailey, the chief executive of the Financial Conduct Authority, told The Yorkshire Post that Britain lacks an “adequate” complaint resolution mechanism for small firms who believe they have been mistreated by the banks. Mr Bailey said he was working with Parliament to try to find a way of putting this right. The all-party Parliamentary groups on Fair Business Banking and Alternative Dispute Resolution have launched an inquiry into “suitable mechanisms” that can provide a long term resolution process for firms who find themselves in a financial dispute.
Ms Wayman said: “Andrew is right to say there is a need there, and it’s good to see that steps are being taken to think about how that might be addressed.”
Ms Wayman said there were encouraging signs that the banking sector was willing to learn after the mistakes made in the run-up to the financial crisis.
She added: “It’s really important that there’s a consistent message with that and they keep at it, because it won’t happen overnight.”
Ms Wayman was appointed as the chief ombudsman and chief executive of the Financial Ombudsman Service in 2014.
Ms Wayman is the former principal ombudsman and legal director, and has been with the Financial Ombudsman Service since 2000.
She previously worked in the insurance sector and is a barrister by training.