Posts Tagged ‘ppi’
The latest Government acronym the CMR (Claims Management Regulator) has recently announced new rules governing Claims Management companies. New rules, that are, apparently “extremely disappointing”.
The Citizens Advice (no longer a Bureau) have been campaigning for tougher regulation on the firms who chase you (and ambulances) in the hope of making a fast buck. Citizens Advice wanted the following tougher regulations to apply:
Barred from cold-calling.
Ban on charging up front fees.
Charges and fees should only be in proportion to the compensation gained and paid at the time of payout.
All contracts to be signed in writing by the consumer.
A standard written contract that provides clear consumer information on risks and cooling-off rights.
While you might wonder at the legality of any company being enforceably engaged without a signed written contract in place, this is the only recommendation the new CMR have seen fit to introduce- firms must agree contracts in writing with their clients, before any fees can be taken, and must refer to their regulatory status as being regulated by the claims management regulator – rather than the Ministry of Justice. The regulator has also banned advertising that offers “vulnerable” individuals a cash incentive for signing up to use their services.
CMR head Kevin Rousell said: “I want people to have time to think through their arrangement and be happy and clear about exactly what the deal is before they part with any money. These new rules will root out poor practice and ensure consumers are better protected by making contract terms much clearer.”
However, Gillian Guy, Citizens Advice Chief Executive retorted:
“Too many people have been ripped off by these predatory firms who use underhand tactics to make money from people who often don’t have a claim to make.
“The new Conduct Rules are extremely disappointing. The regulator has let consumers down by not banning upfront fees, barring firms from cold calling or making sure fees are in proportion to the compensation gained.”
Currently, around 3,000 claims management companies are licensed to provide claims management services; around 1,900 licensed for personal injury and 1,100 for financial claims, largely PPI focussed. Between April 2011 and March 2012, 260 claims management companies had their licences removed.
In 2012 Citizens Advice Bureaux dealt with over 16,500 problems with PPI, a third more than in 2011. Just under 3,300 of these were about claims management companies. Between April and October 2012, the Citizens Advice consumer service handled over 4,800 queries about claims management companies offering PPI compensation services.
Citizens Advice research found that 9 out of 10 people were pestered by calls, emails and spam texts from these firms within 12 months. While advice is to never reply to spam texts (even if prompted to send STOP or the like) you can forward spam texts to your provider to deal with- 7726 for Everything Everywhere or O2, 37726 for 3, 87726 for Vodafone.
They also found that:
2 in 3 Claims Management companies don’t tell people how much they would charge for their services
72% don’t say when they will charge their fees
4 out of 5 do not give information about their cancellation rights
just 43% say what would happen if you took out a claim
and less than half were clear about people’s chances of success
1 in 5 CAB clients were lead to believe they could make a claim for PPI – even if they had never been sold a policy. Claims companies take around 25% of a person’s successful PPI claim in charges, even though you can do it yourself very easily for absolutely nothing.
Saviours of the entire world, Which!!!, want to someone to stop us all from being spammed with nuisance calls and texts from PPI and personal injury firms, haranguing us all into making claims.
According to statistics, seven out of ten people in the last three months have been cold called by companies, while two-fifths have received an unsolicited text message. And so, Which%”|! want Ofcom and the Office of Fair Trading to get together and stop ‘intrusive and distressing’ calls and texts.
While the Ofcom/OFT dreamteam are at it, they should put an end to unwanted calls from double glazing firms and market research companies.
Banks have also been complaining about credit management companies, saying that they typically take a quarter of any payout and have made their own efforts to pay compensation far more complicated and have upped the amount of bogus claims. However, you could argue that these CMCs are alerting people to money they didn’t know they were owed.
Either way, Which<<< want to see a tag-team to make sure these CMCs are playing fairly and the threat of fines should see to that.
Richard Lloyd, Which!!!!!! executive director, said: “Unwanted calls or texts are not just a nuisance, they can be intrusive and distressing. Many of us have been bombarded with spurious claims of PPI or injury compensation, and people are telling us they are totally fed up with this nuisance and want to see action.”
“Our research once again shows that the behaviour of unscrupulous claims management companies must be tackled to stop those exploiting consumers who could claim compensation for free themselves. We want to see tougher regulation from the Government to clean up the CMC industry.”
A spokesperson for Ofcom said: “Ofcom has powers to take enforcement action against companies who breach rules on silent and abandoned calls and we take this issue extremely seriously. Ofcom is already playing an active role in the coordinated effort to tackle the wider issue of nuisance calls alongside other regulatory bodies and government.”
The British Bankers’ Association and the FSA are currently in talks in a bid to put a deadline on PPI claims, possibly set for next summer. Banks will need to pay for a huge advertising campaign to ensure that everyone is aware of the end date for claims.
According to reports, the FSA is sympathetic to the banks’ concerns that claims regarding mis-sold PPI may never end. So a deadline is being put into action and there is likely to be new regulations put in place. One proposed regulation would mirror existing claims rules (that people have six years to lodge a complaint), but if consumers become aware of mis-selling only after this period, they will be given a further three years to lodge a complaint. The new advertising campaign will most likely act as a trigger for the three-year deadline.
An FSA spokesman said: “As you would expect for an issue of this scale and complexity, we have considered a number of options and continue to do so. PPI is an ongoing and high-profile issue and we are monitoring it closely.”
There is still a huge amount of work to be done by the banks. It looks like the total cost to sort this out is in the region of £25 billion, which is considerably more than the £13 billion put aside. And there’s more and more people coming forward to claim compensation, with the Ombudsman adding 1,000 more staff to deal with the hike in complaints.
2013 will see a record number of people getting payouts from banks over the misselling of PPI policies, after the Financial Ombudsman Service said it reckons that it’ll resolve almost three times as many cases as 2012.
The FOS expects to sort out 245,000 cases in this financial year, compared to the 90,000 it has dealt with in the current one.
Tony Boorman, deputy chief ombudsman, said: “Two years after the court ruling confirmed the approach that financial businesses should take when handling PPI complaints, it’s disappointing we are still seeing significant numbers of unresolved disputes about mis-sold policies being referred to the ombudsman.”
“While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience. This has a marked impact on our workload.”
In addition to this, the FOS is going to start charging banks £550 (instead of the previous £500) for each case dealt with, not to mention the upfront fee of £350 for each case, which is on top of the £550. If there’s one thing we can all take from this, there’s small joy to be had knowing that banks will know how irritating it is to be hit with hiked-up charges for no reason.
“Our proposals ensure we have the resources to tackle these record case volumes, and the businesses responsible for generating the biggest workload contribute the most to sorting it out,” Boorman said.
When you watch an advert for a bank, they’re all acoustic guitars and kindly Northern voices acting like they’re your best pal. The people who work in banks feel differently, and according to an investigation, they feel pressure to sell products to customers, regardless of whether they are at all appropriate.
PPI mis-selling fines? The banks clearly aren’t phased at all.
A Which!!!! survey declares that two thirds of bank staff said there is now “more pressure than ever” to meet sales targets, with almost half of staff surveyed saying that they knew colleagues who had mis-sold products just to meet their targets and that 40% said that they are encouraged to sell even when it isn’t appropriate.
Which!$!? interviewed staff from HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays and Santander, and found that staff are pressured into selling, even if there’s no bonus at stake.
Which!\^~#!! chief executive Peter Vicary-Smith called for “big change” across the banking industry, with customers – not sales – put first. “Our survey reveals the stark realities of the sales culture that still exists at the heart of the banking industry,” he said. “Senior bankers say the culture is changing but this shows it just isn’t filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.
“We’re calling on the banks to be much more transparent about their sales targets and incentives. We also want to see bankers meet professional standards and comply with a fully independent code of conduct.”
The PPI scandal was one of many items on the list of things to hate about banks and the finance world is desperate for some good PR in the fallout. However, it doesn’t look good as banks are being accused of still failing to deal with the complaints surrounding their mis-selling of PPI.
The Financial Ombudsman told MPs that banks are still not investigating complaints and rejecting legitimate disputes from customers. However, this could be down to a flood of fraudulent complaints, with the banks saying that a third of complaints are being made by people who haven’t ever taken out a PPI policy.
The main culprit, according to financial institutions, are ‘no win, no fee’ firms.
Chief ombudsman Natalie Ceeney told the Treasury Select Committee: “It is true that banks have used phenomenal resources to deal with the clean up. My issue is still whether standards of investigation are good enough.”
Ceeney pointed the finger at claims management companies, saying that they “typically take 25 per cent of customers compensation for putting a postage stamp on an envelope” and called for a ban on cold calling but criticised the banks for attempting to throw all the blame their way.
Complaining is what Brits are good at and today, the things sticking in the craw are banks and broadband, specifically, all the banks and TalkTalk.
For the third year running, TalkTalk topped the broadband complaints list with most people sick to the back teeth about billing issues and woeful customer service. Ofcom have previously fined TalkTalk £3million for incorrectly billing customers for services they never received. It looks like Ofcom will be having more words with the rubbish provider.
A TalkTalk spokesman said: “We recognise that there is still work to do and we are continually pushing through improvements. Technical faults are fixed faster, more support is being offered when customers move house, and our online support system, which now accounts for 70 per cent of customer contacts, is being further enhanced.”
And over in the world of finance, complaints are up by 59%. There’s still a backlash over missold PPI as well as banking, home finance, insurance, life assurance and pensions issues too. PPI complaints were up 129%, which in real money, is a total of 2.2 million in a half-year.
The FSA report is based on data the banks have reported to the watchdog in their regular complaints returns.
Every single one of us might be sitting on a potential claim worth THOUSANDS of pounds over PPI mis-selling. It’s true because all those adverts for PPI claim companies say so. But what should you look for when you’re choosing one of them to help you claw back your money?
You need one that displays wisdom. You need an owl. An owl that lives in a tree trunk full of money. And that doesn’t even need to see your paperwork, presumably because it’s got some kind of magical owl ESP and knows exactly what you signed up for. Once you’ve seen this, why would you align yourself with a PPI claim company that ISN’T represented by an owl? Why??
Payment protection insurance (PPI) was the most complained about financial thingummy in Britain in the last year. It was so jarring and irritating that it accounting for almost two thirds of consumer disputes mediated by the Financial Ombudsman Service.
PPI, which allows you to maintain loan repayments even if they lose their job, prompted a whopping 157,716 disputes during 2011. That’s the most complaints ever generated by a single product.
The insurance, which can be tied in with loans or credit cards, caused a kerfuffle last year as it was sold to consumers who didn’t actually know they were buying it, which of course, saw one of the biggest misselling furores in Britain’s banking history.
Lloyds, Barclays and Royal Bank of Scotland all kept money aside (over £4 billion pounds) in preparation for paying all the compensation to PPI customers. The ombudsman said it mediated a total of 264,375 disputes between consumers and financial services companies in 2011.
“This year’s been a struggle for many consumers, who’ve found themselves burdened by debt, besieged by claims companies and bewildered by the complexity of financial services,” chief ombudsman Natalie Ceeney said.
The PPI claim bandwagon is still rolling, and like ambulance chasers before them, the number of PPI claim management companies (CMCs) is also multiplying like horny rabbits. However, there is still over £5bn in mis-sold PPI yet to be claimed, meaning it is still worth their while trying to snare unsuspecting consumers.
So, your alternative (but not-as-interesting) consumer champions MoneySavingExpert.com and Which! have joined forces to increase awareness of how easy it is for consumers to reclaim mis-sold PPI without paying anything and to tackle the unscrupulous CMCs who exploit consumers wanting to claim back their money.
Which! and MSE are calling a ‘PPI Summit’ next Monday to try and “get all parties working together to help people get back the money they are owed and help restore trust in the PPI claims process.” They are also launching a radio advertising campaign to increase awareness. You can listen to it here if you are so inclined.
However, the best thing about this collaboration is the shouting about their free PPI claiming tools (at which.co.uk/ppi or moneysavingexpert.com/ppi ) which enable you to enter your email address, policy details and mis-selling reason (see below) and they will email your claim off to the relevant department of your PPI provider. Simples. With an average payout of £2,750, and CMCs taking a standard fee of 25% plus VAT, consumers could pay £825 for almost literally nothing at all. Which is never a good idea.
Which!’s mis-selling checklist helps you determineif you have a PPI claim, and therefore what your mis-sold reason would be:
If you can answer ‘no’ to one or more of these questions, then you may have been mis-sold PPI.
If the insurance was optional, was that made clear to you?
Did the adviser tell you about any significant exclusions under the policy – for example, the exclusion that says you won’t be covered for any pre-existing medical condition?
If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance up front in one single payment?
If you had to pay for the PPI as a single payment, did the adviser make it clear that the insurance cost would be added to the loan and you would be paying interest on it?
Single premium PPI insurance normally only lasts for five years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium, even after the insurance expired.
If you bought PPI after 14 January 2005 did the adviser try to persuade you to take it out by saying something like ‘we strongly recommend that you consider taking out PPI’. If so, the sale counts as an ‘advised’ sale and they should have issued a ‘demands and needs statement’ to show why a particular policy has been recommended and why it is suitable for you. If they didn’t, this is grounds for complaint.
MoneySavingExpert.com’s Martin Lewis said:
“We’re at crisis point now. There’s over £5 billion of PPI to be given out but, scarily, almost £2bn of that could end up in claims firms’ coffers, rather than people’s pockets and often all these firms do is send out similar template letters to the ones we give people for free.”
Which! executive director Richard Lloyd said:
“It’s a scandal that too many CMCs have been ripping off consumers who don’t realise there are simple steps they can take to claim back their money themselves. We’re saying to people today – don’t get robbed twice.”
Bitterwallet executive editor-in-command Andy Dawson said:
Britain’s banks received an impressive 2.5million complaints last year, with customers making a complaint every 12 seconds about Lloyds, RBS, Barclays, Santander and HSBC.
The bulk of the gripes focused on insurance mis-selling and terrible service with customers of the leading five establishments making 1.37million complaints between July and December 2011, a rise of 26 per cent on the previous six months.
The big beef was the misselling of payment protection insurance (PPI) and the financial ombudsman revealed that Lloyds was most griped about. Of the complaints made to banks where original queries were rejected, the ombudsman upheld more than seven in every ten complaints. This leaves the banks guilty of seemingly trying to pull a fast one over people with legitimate grievances.
The complaints list sees Lloyds at the top, followed by Barclays, MBNA, RBS/NatWest, Santander, HSBC and Capital One. It has been reported that 87 per cent of complaints against Lloyds TSB were upheld, compared with Barclays (84 per cent), MBNA (99 per cent), RBS (93 per cent), Santander (55 per cent), HSBC (80 per cent) and Capital One (11 per cent).
Peter Vicary-Smith, chief executive of ninja consumer group Which!!! said: ‘This data is further evidence that some banks are systematically failing to treat their customers fairly when things go wrong. It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the ombudsman, where the overwhelming majority of complaints are then upheld.’
Payment Protection Insurance (PPI) has been keeping Martin Lewis in cashmere socks for years. Spotty bank clerks foisted these insurance policies on practically all customers, whether they wanted them or not, or even whether they were eligible to claim under said policies for years. And years. However, customers eventually got wind of this big moneyspinning wheeze for the banks, and a number of high profile court cases followed, culminating in a crucial High Court defeat in April. British banks lost the appeal over new rules which require insurers to review past sales of PPI, even when customers had not complained.
As a result, many customers are now receiving payouts, or are expecting some kind of cash back after banks were forced to set aside more than £7 billion in compensation. It is estimated that there are about 12 million outstanding policies.
Those mis-sold PPI can claim back the cash value of up to six years’ premium payments made, plus a charge of 8% interest on that cash to compensate for the period where the bank had customers’ money. The average payout is expected to be £1,000, which will include around £240 in interest.
However, those expecting an entirely tax-free windfall are in for a shock. While the refunded payments element of compensation will be ignored by the taxman, he is very interested in the notional interest element of the compensation. Treating this as if it were ordinary bank interest, this amount should therefore be taxed at either 20% or 40% depending on whether you are a basic or higher rate taxpayer. This gives an ‘average’ tax charge of £48 or £96.
A spokesman from HMRC told the Telegraph: “No tax is generally due on the repayment element of compensation paid to those mis-sold PPI. However, the additional interest is taxable – in line with other compensation claims. Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable. Customers should check with their PPI provider as to whether tax has been deducted at source.”
So, according to the taxman, the tax treatment of bank interest received is being applied correctly, but is it right?
Last night consumer groups called for banks to foot the bill. Marc Gander, of the Consumer Action Group, said “For years [the banks] took people’s money … and lent it back out through overdrafts, personal loans and credit card loans charging interest rates of between 15 and 29 per cent. When they are finally rumbled and ordered to pay it back they are charged just 8 per cent in interest, a fraction of what they have made from their customers in the meantime.”
Similarly, we can only assume that HMRC is not going to repay the tax charged on the profits earned by the banks on this extra income, so by levying a double-tax charge on the individuals as well, surely the taxman is having his proverbial cake and munching it too? 20% of an average £240 per £1,000 out of £7 billion is a nice little earner for the Treasury. Bet someone will be getting a bonus…
Now that we own Nat West, we can really moan at them when they’re being useless. And that’s exactly what we’re doing as reports note a steep increase in complaints in the first half of 2011, receiving 147,109 grievances, up from 84,109 from the previous year.
The bulk of the complaints came from customers with current accounts, with 96,205 people venting spleen. That’s 42pc more than in the same period last year.
Complaints for insurance-related products also rose, increasing by 227pc with payment protection insurance (PPI) accounted for 31pc of gripes. It’s a good thing the RBS (who own Nat West) set aside £850 million to pay for all those PPI claims, eh?
Brian Hartzer, chief executive of RBS and NatWest retail bank, said the bank was determined to fix the root cause of complaints and improve the handling procedure.
“We know we must do better still and I am confident we’ll see significant improvements in the months ahead,” he said.
Don’t hold your breath.
The Royal Bank of Scotland and Lloyds Banking Group clearly think that Barclays are a big pile of jessies as they won’t be following their lead on the offer of automatic payment protection insurance payouts.
Barclays announced yesterday that they’re going to pay out some of its customers’ PPI complaints, ‘no questions asked’, after they got stung by the High Court for misselling of PPIs. RBS and Lloyds obviously believe this is wimp-talk.
In fact, they’re going to ask lots and lots of questions, preferring to look at claims on a case-by-case basis.
Kath Allen, spokesperson for RBS, says: “We are taking active steps to process all complaints within the Financial Service Authority’s (FSA) timeframes. We remain focussed on making sure our customers get a fair outcome within those timeframes.” So if you made a claim before 20th April, you should have a decision by 31st August. Anything after that, you should have a response within 16 weeks.
Charlotte Sjoberg, spokesperson for Lloyds Banking Group, says: “We are handling all PPI complaints fairly and consistently regardless of when they were received. We will ensure that we provide a clear response to every customer that has submitted a complaint to us before 6 May by the end of August.
“For customers who have submitted a complaint on or after 6 May, will we provide a full response within 16 weeks of receiving the complaint.”
There you have it. No gestures of goodwill from this particular shower of shits.
Remember us telling you about Barclays getting in a bit of bother over the misselling of PPIs? Well, they’re going to refund them, ‘no questions asked’ (provided you complained before 20 April).
These payments are a “gesture of goodwill” from the bank and will be made up of all premiums paid plus interest.
With tens of thousands believed to be in line for big payouts, Barclays could be looking at forking out around £1bn.
If you’re one of those that complained, you’ll have to wait around 16 weeks before this all gets resolved. A pain in the rear perhaps, but at least you’ll be getting your money back.
In a statement about its decision to compensate existing claimants, Barclays said: “We have said before that when we get things wrong, we apologise and work hard and work fast to put them right as quickly as possible.
“Working in close co-operation with the FSA and the Financial Ombudsman Service, and in recognition of the delay customers have experienced whilst awaiting the outcome of the high court judgement, we can confirm that we are contacting customers whose complaint was put on hold on or before 20 April with an offer to settle their complaint in full as a gesture of goodwill.”
If you think you might have been mis-sold a PPI policy, then you need to complain directly to your bank. If you don’t know how, the Guardian have a nice template letter you can use.