In England, disputes between financial institutions and borrowers are generally handled through the Financial Ombudsman Service. Millions of UK citizens have taken their disputes to this service in order to have them resolved in a fair manner.
Established in 2001 as a result of the Financial Services and Markets Act of 2000, the Financial Ombudsman Service is designed to settle disputes between consumers and UK-based companies that provide financial services, such as banks, building societies, insurance groups, investment companies, financial advisors, finance lenders and the like.
Essentially, if a customer has a dispute or is unsatisfied with the service, they first must give the institution that handled the loan a chance to address the complaint itself. These businesses have 8 weeks to resolve the complaint on their own. If they do not or if the customer is unhappy with the offer, then they can take their complaint to the Financial Ombudsman Service.
Basically, the ombudsman will make the decision based on all the information available. From relying on the relevant law, regulations, rules and standards that apply combined with all the information at hand, the ombudsman then gives a final decision that is fair to all parties involved.
While independent, it has been reported that over 60% of the cases are generally ruled in favor of the customer, although some have questioned the amount of money that is awarded in such disputes especially when it reaches the compensation cap which helps keep businesses from paying out so much that it puts their finances in distress.
Over 90% of all customer complaints handled by the Financial Ombudsman Service are settled in the early stages which is a more informal setting where both the customer and the business work together to reach an adequate conclusion.
In what is turning out to be the single largest financial scandal in recent history, PPI claims are surpassing record amounts at the Financial Ombudsman Service. In fact, so many complaints have been catalogued that the service is adding over 1,000 new staff and employees to handle the workload.
Naturally, one of the major complaints by customers has been that this services is taking too resolve PPI disputes. Given the sheer magnitude of the PPI scandal, such complaints where expected. It is estimated that over 27 million PPI policies were sold when complaints about overcharging began to surface. Given that only a fraction of the total number of people who might have been mis-sold PPI have filed complaints, it can be fairly estimated that many more will file their complaint in the near future.
For the foreseeable future, it appears that the Financial Ombudsman Service will continue to add staff and employees to handle the PPI cases. The sheer number of people that have been affected will mean that the service will be handling PPI cases for several years to come.