Up to 500,000 PPI victims are denied payouts

UP TO 500,000 victims of Britain’s biggest mis- selling scandal may have been cheated out of compensation by the financial ombudsman, it emerged last night.

An undercover probe has found staff at the Financial Ombudsman Service were placed under enormous pressure to process a huge backlog of complaints about payment protection insurance (PPI).

Threatened with losing pay rises and promotion if they did not meet their goals, staff said they leaned towards rejecting complaints as this was quicker than challenging the banks.

Channel 4’s Dispatches found some employees were so inexperienced they had to Google the name of the financial products they were investigating.

The ombudsman has rejected 496,000 complaints and upheld 924,000 since banks lost a crucial high court challenge on PPI in April 2010.

Banks – the biggest offenders – have paid out almost £30billion to compensate around 12million customers.

Sold alongside personal loans and credit cards, it was meant to provide a safety net if people lost their jobs or became too sick to work. But in many cases they were unable to claim on the policy or unaware they had been sold it.

A spokesman for the Financial Ombudsman said it would ‘consider any concerns’ raised by Dispatches.