Number of payment protection claims soars

The challenges of the Financial Ombudsman Service workload on dealing with complaints for payment protection insurance sold by banks and other lenders are unprecedented. 300,000 cases have been received by the end of 2011.

The number of new complaints about mis-sold PPI – at least 165, 000 – will account for around 60% of new cases in 2012.

Initial feedback from lenders suggests that most believe substantial volumes of PPI complaints will arise for another two or three years. The number of PPI complaints (1 million) made direct to banks and other financial businesses last year alone, is incredible.

This horror story turns many people off from buying income protection insurance, but there are many reputable insurers and specialists who sell direct to customers. You do not have to buy from your bank.

Income protection insurance news: 27 January 2012