Posted: 30th November 2016
The financial ombudsman has had to look again at the case of a man who complained that he had been mis-sold PPI; a case that could lead to thousands more claims.
A man who had his initial complaint about PPI on his MBNA credit card rejected by the ombudsman, forced legal action from a claims company which meant that the ombudsman has to reconsider.
That could lead to many more rejected cases being reopened.
At least £85 million of redress could need to be paid back to 50,000 people who have been rejected, with many new claimants coming forward.
The financial ombudsman, which aims to provide independent adjudication on disputes between consumers and financial institutions, has approved over 60% of PPI complaints brought to them over the last few years.
That rate is too low, according to critics, given the scale of mis-selling of PPI by finance companies over the last three decades.
A PPI claims company calculated that a balance on an average credit card with PPI could escalate from £1,000 to £3,000 in a decade if the recipient was only making minimum payments to the balance at £1,000. The additional £2,000 would be made up in PPI costs and compounded interest.
The PPI claims company in question started a judicial review of the ombudsman based on the MBNA case, the only one where the service has given a formal adjudication. It has accused the body of “stockpiling” 5,000 more cases before the final stage to avoid being legally challenged over them.
In the MBNA case, the Financial Ombudsman Service went through issues such as whether it was clear that the PPI cover was optional and whether the policy was affordable. The conclusion was that the policy did not breach any rules. Many of the cases awaiting a final adjudication brought to the ombudsman by We Fight Any Claim are over MBNA and Capital One and store cards issued by Genworth, now owned by Axa, the insurer.
If you believe you were mis-sold by MBNA then begin your free PPI check with us today!