The Financial Ombudsman's Approach to PPI

By: Nik Jones

The first step in how to claim PPI Refund is always to complain to the firm who sold you the policy. Many people do this via a claims management company who specialise in claiming back mis-sold PPI.

Often, a complaint to the firm will be successful. The major banks and other institutions are now resigned to paying large sums in compensation to customers who were mis-sold PPI.

However, if the firm rejects your complaint, or makes you a redress offer you are not satisfied with, you can refer the complaint to the Financial Ombudsman Service (FOS). The FOS has experience of investigating hundreds of thousands of PPI complaints.

You will need to complete the FOS PPI consumer questionnaire. This includes questions about when the plan was sold, why it was sold, your personal circumstances at the time and why you feel you have grounds for complaint. Don't worry if you find the form daunting as your claims management company will help you.

The firm must complete the FOS 'response form', which includes a section explaining why they rejected the original complaint.

Key considerations for the FOS will be whether:

• the firm gave you information that was clear, fair and not misleading, to allow you to make an informed choice about the transaction.
• the firm took adequate steps to ensure that the PPI was suitable for your needs.

The FOS does not operate like a court of law. It rarely holds hearings, and adjudicates on cases based on the paperwork provided by the complainant and by the product provider, and on each party’s recollections of the sale. Unlike a criminal court, you don’t need to prove beyond reasonable doubt that you were mis-sold a policy, as the FOS will find in your favour if it believes there is a higher than 50% chance that you were disadvantaged as a result of the firm’s actions. Judgements are also made on the facts of the case, not on how well you argue your case.

The FOS is not a consumer champion: it makes balanced decisions as to whether the customer or the firm is in the right, yet it found in favour of the customer in over 80% of the PPI cases it handled from 'big four' banks in the second half of 2011. (Source: Which?)

The FOS does not charge for its services, so you have nothing to lose by making a PPI complaint. There is a high probability your claim will be successful, and if it isn’t, it won’t cost you a penny.

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