Financial Ombudsman Possibly Facing Legal Action Over PPI

August 17, 2016
by admin in PPI News

The United Kingdom’s champion for consumer justice faces legal action after a claims management company had found it guilty of rejecting consumer PPI claims over credit cards. The case would guarantee a judicial review over its handling of complaints for PPI.

The anonymous CMC is preparing its High Court case against the Financial Ombudsman. The CMC claims that the FOS had held back about £85m consumer redress for 50,000 people rejected by the Financial Ombudsman.

The Ombudsman is the next stop for PPI claims when banks reject it or consumers believe banks did not provide proper compensation.

For most High Street banks, the FOS had judged 70% in favour of consumers. The accusations come timely over the higher rate of its inclination to judge claims not in favour of consumers since 2015 the previous year.

Banks have been paying out more than a million every quarter during its profit reviews. Much to the disappointment of investors, many banks — except for Lloyds — had announced additional inventory for their PPI refund packages.

PPI claiming is set to end in January 2019. The Financial Conduct Authority decided to move it at a later date to satisfy all sides concerned with the PPI issue. Consumer groups are still disappointed with the City watchdog’s decision.