The Financial Ombudsman Service has revealed that it has received 60% more complaints relating to income protection and payment protection insurance policies as compared to the previous year. The mediator has published data and statistics relating to complaints received between April and June 2012. Comparison with the corresponding quarter of 2011 reveals that there has been a significant increase in complaints received. In the second quarter of 2011, the Financial Ombudsman Service had ruled in favor of customers in 41% of all cases. This figure has come down to 31% according to data released by the FOS.
A spokeswoman appointed by the FOS has indicated that the current economic condition is to blame for the increase in complaints relating to income protection. According to her, many individuals who have lost their jobs have tried to file a claim on their policy and have discovered that they do not enjoy coverage or have been excluded from the protection. Instances of individuals who could not file complaints despite paying for the policy have been numerous. Despite the increase in the complaints relating to income protection, the total number of complaints received by the financial mediator has witnessed a 39% reduction. In the second quarter of 2011, the mediator had received just above 80,700 complaints. This year, it has received just a shade above 57,000 complaints out of which half are relating to payment protection insurance policies.
Complaints relating to other financial products have also witnessed an increase. Critical illness product related complaints have risen by 44%. Complaints relating to whole life insurance policies have risen by 35%. Sipp related complaints have risen by 19% while complaints relating to personal pension policies have risen by 17%. Annuities and and portfolio management related products have witnessed an increase of 10% and 18% respectively. The success rate ranged from 20% to 40% for most of the products mentioned above except for portfolio management cases where 59% of all cases were ruled in favor of customers.