PPI complaints surge after FCA enlists Schwarzenegger
19-04-2018 10:34
Complaints about PPI surged to a four-year high after the Financial Conduct Authority enlisted Arnold Schwarzenegger to spread the word about claiming for compensation.
Complaints about payment protection insurance - PPI for short - rose 40% to 1.55m in the second half of 2017, the FCA said. The surge in complaints fuelled payouts totalling £415.8m in January - the highest figure since March 2016.
The jump in complaints to firms followed the launch of the FCA's advertising campaign featuring an animatronic model of Schwarzenegger's head urging people to "do it now" and enquire about a PPI claim. The first campaign started in August 2017 and a second is scheduled to run until 16 May.
Banks and other lenders have now paid out £30bn in compensation to customers who bought PPI in the 1990s and 2000s. PPI is by far Britain's biggest financial mis-selling scandal. Customers have until 29 August 2019 to claim.
The FCA's campaign has had a direct impact on banks. Lloyds Banking Group, which was the biggest seller of PPI, paid out more money for PPI than expected last year after the Schwarzenegger ads prompted people to claim.
CYBG, which owns Yorkshire and Clydesdale, increased its PPI provisions on 18 April and said complaints had peaked in January. The bank said the FCA's campaign was one of the reasons for the unexpectedly high levels of complaints.
Christopher Woolard, the FCA's executive director of strategy and competition, said: "Having set a deadline for PPI complaints, we are encouraging consumers to decide whether they want to claim, and if they do, to make their complaint as soon as possible, as many already have.
"We are continuing to monitor and challenge all firms to ensure they maintain the expected standards and are delivering on their commitments to make it easy for people to complain about PPI."
The rise in PPI complaints fuelled a 13% increase to 3.76m in the total number of complaints made to financial firms in the second half of 2017. Excluding PPI, the number of complaints fell by 13,000 from the previous six months.
Banks sold PPI, often using misleading practices, to customers taking out mortgages, credit cards and other loans to cover payments if they suffered loss of income due to illness or unemployment. Many buyers, such as self-employed workers, did not qualify or the policies failed to pay out as promised.
