The volume of complaints regarding payment protection insurance (PPI) may have hit its peak, after the Financial Ombudsman Service reported a decline in the number of complaints.
Though numbers remain high and banks are still allocating hundreds of millions into the compensation pot for affected customers, this may be a sign for banks that the worst has passed.
The chief financial ombudsman, Natalie Ceeney, reported that the ombudsman was receiving 2,000 new cases every working day, a third less than at its peak in mid-winter.
Banks have already set aside in excess of £14 billion in compensation for PPI and hedge swap mis-selling compensation. Barclays' provision alone has recently been increased to around £4 billion.
Barclays' chief executive, Antony Jenkins, conceded that the sum was a "very large number", but he added that the "conservative" estimate was essential for establishing greater certainty surrounding the bank's capital position.
Banks may hope to benefit from greater certainty if complaint numbers continue to fall. But figures suggest that only 15% of customers who have been sold a PPI policy have decided to claim to date.
Ms Ceeney warned against attempts to predict the patterns, while she also criticised banks' handling of complaints.
"The interesting thing about PPI is none of us know where it's going to go," she said.
"Will it fall to 1,000 in six months? I just don't know."
Once referred to the ombudsman, over three-quarters of complaints (78%) were being resolved in the customer’s favour, she revealed.
"Too many of the banks have not taken enough care on PPI complaint handling. Most of the big banks have outsourced it," she said.
"The problem if you outsource is that you have to pay huge amounts of care to make sure your outsourcers are working to the right standards."
Keith McDonald
Which4U Editor
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