Want To Know The Actual Way The FOS Approaches PPI Complaints? Read On!

October 13, 2014
by admin in PPI News

The Financial Ombudsman is the next go-to establishment after the bank or lender had stiffly repaid an unjustly amount of compensation for consumers. How do they have a seven out of 10 consumer-favoured decision rating? Here’s an excerpt.

“When we uphold a consumer’s complaint, we usually tell the financial business to put the consumer in the position they would now be in if the original problem that led to the complaint hadn’t happened.”

When we uphold a complaint about the sale of a PPI policy, we usually tell the business to put the consumer in the position they would now be in if they hadn’t taken out the PPI policy. The regulator has published guidance that also requires businesses to take this approach when they are dealing with PPI complaints.

We look at all the circumstances of a case to determine what represents fair redress. When we uphold complaints about the sale of PPI, redress can include the restructuring of an account as well as a payment of compensation. What we will require a business to do in terms of calculating redress will depend on the kind of policy the consumer took out – and whether it was attached to a loan or a credit card, or whether it was a stand-alone regular-premium policy:

  • Redress for a mis-sold single-premium PPI policy attached to a loan.
  • Redress for a mis-sold PPI policy attached to a credit card.
  • Redress for a mis-sold regular-premium PPI policy.

What we consider to be fair and reasonable redress will depend on the individual circumstances of the complaint. For example, we may change the calculation of redress where the consumer:

  • has fallen behind in their payments to their creditors (our approach in these cases is set out below); or
  • has made a successful claim on their PPI policy (our approach in these cases is set out below).

Although we can’t anticipate every possible set of circumstances, some common scenarios we see are set out in detail below.

The approach set out in this section of our website is based on insight from cases that we have seen to date. But it is important to note that this may be updated in light of cases we receive in the future. We may also decide to adopt a different approach to a particular case to ensure we reach a fair decision.

Read more about this here!