U.K. Ombudsman Says 55% of Complaints Over Loan Insurance

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More than half of complaints from U.K. bank customers in the three months through June related to improperly sold loan insurance, Britain’s financial mediator said.

The Financial Ombudsman Service handled 89,935 grievances in the period, with 55 percent about payment protection insurance, it said in a statement on Tuesday. Customers can refer disputes to the London-based ombudsman, which mediates on their behalf with financial-services companies.

“Complaints about PPI are still the main driver of financial disputes,” Chief Ombudsman Caroline Wayman said in an e-mailed statement. “Although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.”

U.K. banks have paid out about 20 billion pounds ($31 billion) in compensation for PPI are still providing redress almost two decades after the insurance for loan repayments was first sold. Last month, the Financial Conduct Authority fined Lloyds Banking Group Plc 117 million pounds for mishandling complaints about mis-selling PPI, the largest such penalty imposed by the U.K regulator.

The FOS received about 4,000 new complaints about PPI each week, with 74 percent upheld overall in the quarter. Bank accounts and mortgages were the two financial products most complained about after PPI, the ombudsman said.

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