The deadline for submitting a PPI complaint fell in August 2019 but businesses were inundated with enquiries and complaints from customers, leading to a huge backlog.

The Financial Ombudsman Service (FOS) today revealed it saw a spike in PPI complaints (24%) around the time of the August 2019 deadline set by the City regulator, and a 54% spike in enquiries from people after the deadline. The majority of complaints came from complaint management companies.

As firms continue to get through the backlog, they have told the Financial Conduct Authority that it will be summer 2020 before they’re able to give some customers a response.

Consumers then have up to six months to complain to the FOS.

The FOS also revealed it received a total of 270,000 complaints in the 2019/20 tax year, with 122,000 relating to PPI.

The data showed it had a low PPI uphold rate in favour of the consumer – 17%.

There were year-on-year increases in the number of complaints about instalment loans with 2019/20 figures double that of the previous year – 10,880 and 5,162.

Complaints about guarantor loans also doubled in the year, from 529 in 2018/19 to 1,043 in the last tax year. It noted that 89% of complaints were upheld in favour of the complainant.

A third of complaints (32%) were upheld in favour of the consumer, up from 28% in the previous year.

As well as receiving 642,446 consumer enquiries, it resolved nearly 300,000 complaints, down from the 376,352 recorded in 2018/19 and made 29,746 decisions in the year.

However, FOS said it received fewer complaints than a year earlier, which was mainly due to a reduction in the number of PPI complaints and short-term lending.

‘Stop unfairness arising in the first place’

Caroline Wayman, chief ombudsman and chief executive of the FOS, said: “This year the FOS resolved well over a quarter of a million complaints. Each one of those involved a question of fairness, and someone whose life had been disrupted because of a financial dispute.

“The fundamentals of good customer service, and good complaint handling, are constant, and the majority of financial businesses know this. However, some businesses still need to put fairness first in how they handle customer complaints. A key part of our work in the future will be to proactively prevent complaints, to stop unfairness arising in the first place.

“The unprecedented Covid-19 situation has already given rise to many new and complex questions of fairness when things go wrong in financial arrangements. If customers are unhappy with how a financial business has treated them, they can come to the Financial Ombudsman Service for free, and we will see if we can help.”