Posts Tagged ‘ppi’
The PPI debacle has become one of the most shameful episodes in British banking of the last ten years. And there’s quite a range of knobbery to select from.
A whopping £17.3 billion has now been paid out, after PPI was ruled to be an utterly despicable piece of mis-selling, often with no actual thought as to whether the customer could pay it back or not.
Payment Protection Insurance or PPI, was meant to protect borrowers in the event of sickness or unemployment, but were often sold to those who would have been ineligible to claim.
The Financial Conduct Authority (FCA) said it would use its findings, due to be published in the summer, to assess if the current approach to compensating customers is working properly. Because there just hasn’t been enough money squandered on this.
The FCA said in a statement: “The FCA will then consider whether further interventions may be appropriate, which could include a consumer communication campaign; a possible time limit on complaints; or other rule changes or guidance, or whether the continuation of the PPI scheme in its current form best meets its objectives,”
“While this work continues, the FCA expects firms to continue to deal with PPI complaints in accordance with our requirements,”
Banks such as Lloyds, Barclays, HSBC and Royal Bank of Scotland have already set aside £24 billion to compensate consumers, with many of them wiping off the entire debt of customers
Since 2011, the banks have dealt with over 14 million complaints about PPI, and have got to around 70% of customers paid back.
There’s still around 4,000 complaints coming through the banks each week about PPI, so even if you have the slightest doubt, get in touch with them.
Honestly, you can’t trust anyone these days.
More financial institutions raiding the funds in the large biscuit tin under the bed news as Barclays have put aside £500m to cover the cost of the investigations into the rigging of currency markets.
This £500m is much larger than the £290m of total fines that Barclays have received for fiddling Libor in 2012, and is released as the Financial Conduct Authority tries to sort out a settlement with six major banks over their roles in the £3.5tn a day foreign exchange markets.
We should have a result of the investigations some time in November and RBS will be publishing their results from all this tomorrow.
Barclays told everyone about this provision as they reported their figures for the third quarter of the year, where they also lost £170m as they covered the cost of the payment protection insurance (PPI) mis-selling farce.
Of course, this all means that Barclays profits have taken a huge hit, but frankly, it is their own fault so they can’t moan about it.
The result of all this means that there’s going to be some costs cut. There’s a plan for Barclays to axe 19,000 jobs and investors need to be appeased as they’ve been furious at the high level of bonuses being doled out to top brass.
This all comes after the Lloyds group made similar provisions and, of course, announced huge job losses. Across the banking and finance sector, the PPI scandal is the costliest thing that’s ever happened in banking industry.
The tax-payer saved bank is said to have put aside £600 million to cover the PPI mis-selling shambles, which is on top of another £600m which Lloyds threw at it earlier this year.
Lloyds said at the time that, although the number of PPI claims is falling, it is still paying out around £200m a month to victims.
This is on top of the news that the bank was the worst performing UK bank in the European bank ‘stress test’ and the confirmation that there’d be 9,000 job losses over the next three years .
As PPI was designed to cover repayments on loans and credit cards, most loan and credit card companies sold the product at the same time as they sold the credit.
By May 2008, 20 million PPI policies existed in the UK with a further increase of 7 million policies a year being purchased thereafter. Surveys showed that 40% of policyholders claim to be unaware that they had a policy.
Complaints about PPI (payment protection insurance) have fallen from last year’s figures, which may sound like good news, but according to the Financial Ombudsman Service, it is still at a historically high level.
Basically, this drop isn’t particularly good news as it is akin to saying ‘man only kicked you up the arse 40 times last year, down from the previous year’s 57 buttock assaults.’
The figures are still officially ‘whopping’. The FOS said it took 133,819 PPI complaints in the first six months of the year, compared with 193,054 in the previous six months and these complaints still account for around 70% of the all the cases that the ombudsman receives.
The FOS said: “Around 5,000 people a week are currently asking the ombudsman to look into their PPI complaint. This is down from the highs of 2013 when we were receiving over 12,000 a week, but still significantly more than any other financial product.”
This year, the FOS took on just shy of 400,000 new cases and since 2011, banks have coughed-up £16bn to customers in compensation, and they’re going to be paying out more.
The FOS’s chief ombudsman, Caroline Wayman, said: “Responsibility for sorting out the mass mis-sale of PPI is still the major part of the ombudsman’s workload. We’re seeing more and more people turn to us in frustration where they feel their bank or insurer simply doesn’t understand or really care.”
And get this – complaints are likely to rise even further because the FCA ordered the banks to reopen a further 2.5 million complaints.
They can’t even do an apology properly, can they?
These shortfalls apparently affect credit card customers with Lloyds Banking Group, Barclays, Capital One and MBNA.
It seems that they’ve not paid back charges and penalty fees for those with a policy that is linked to a credit card. While some have seen thousands of pounds repaid in interest and premiums, some customers have been stiffed.
These figures come from a BBC report and, it is worth noting that they’ve not shared their calculations with the Financial Conduct Authority – it seems the FCA have a difference figure and have said: “In some cases a penalty fee may have been incurred for going over a credit card limit regardless of the PPI, in which case we would generally take the view that this charge would not need to be refunded.”
Lloyds Banking Group said in a statement: “We are committed to doing the right thing for our customers and this includes ensuring that each PPI case we receive is investigated on an individual basis. When a customer lets us know that they may have incurred other costs because of their credit card PPI policy, we will investigate and make an appropriate refund.”
This is a story that will rumble on and on.
Allegedly, Lloyds Banking Group – who have never been known not to serve themselves first – have been withholding millions of pounds of PPI compensation, thanks to a loophole in the law.
The Financial Ombudsman Service say Lloyds is using an ‘alternative redress’ scheme, which complies with the Financial Conduct Authority’s rules, as a way not to give customers their full payouts.
The alternative redress scheme is an obscure, generalised rule that assumes that customers took out regular premium policies – and that they must be reimbursed for that.
But some customers didn’t take out regular premium policies. They were sold single policies on more than one loan. So Lloyds have been deducting the cost of a cheaper regular policy from the payouts, even though some customers are owed more.
For example, one Halifax customer with 2 loans was offered £2300 PPI compensation. But when she brought the case to the Financial Ombudsman, Lloyds were asked to pay her an extra £1200.
Lloyd’s said yes, it WAS using the alternative redress system, but argued that it had done nothing wrong, saying: “The FCA handbook is very clear that in these specific circumstances, the provider should give redress that puts the customer in the position they would have been in had the customer taken a regular premium policy.’
If you want to watch Lloyd’s squirm on TV, a BBC special about the PPI compensation, ‘Britain’s Biggest Banking Scandal’ is due to air tonight.
Home Retail Group, the owners of Argos and Homebase, have put aside £25 million to compensate customers who were mis-sold PPI on household purchases such as tellies, kitchens, you name it.
Shoppers who bought items on credit, would’ve been offered PPI cover through the company’s financial services.
The group has made similar provisions in the past, but this is the first time they’ve been made public. Home Retail is writing to affected customers, it said.
Home Retail’s outgoing chief executive Terry Duddy – the managing director of Argos, John Walden, is due to take the reins on Monday – said there was no certainty this was the end of the problem but added it was not in the same league as at the banks which together had paid out £22bn.
This has taken a bit of the shine off the company’s recent set of figures, which saw like-for-like sales at Argos rising 5.2% in the eight weeks to 1 March, while underlying sales at Homebase jumped 9.3% as both chains benefited consumer confidence picking up. The shares closed up 5% at 215.4p.
If you feel like you were mis-sold products by these companies, get in touch with Home Retail Group or call them on 0845 603 6677.
The whole PPI misspelling saga has been dragging on for years. Most commonly attached to loans or mortgages from banks, the cash windfalls received in compensation payouts to the mis-sellees is enough to make you wish you had been
gullible fore-sighted enough to take a policy out in the first place. But if you were unlucky enough to have missed that boat, never fear, a new compensatory ship is rolling in. Card Protection Plan compensation.
The Financial Conduct Authority announced yesterday that they are instigating a new tranche of compensation claims for policies sold by Card Protection Plan Limited (CPP), who, unsurprisingly, sold card protection plans as well as identity protection policies, whatever they are.
An estimated seven million policyholders will receive a letter from CPP during February 2014 enclosing a compensation claim form, or two forms for those who purchased both the card and identity protection policies. The policies were often sold when customers called to register or activate a debit or credit card.
The letter will detail how to make a claim IF you feel your policy was mis-sold. Examples of how products may have been mis-sold include being given misleading or unclear information when the policy was sold, on the basis of which, the policy was purchased. Note that the FCA has already found buckets of evidence of widespread mis-selling by the company, resulting in a £10.5million fine in 2012.
Claim makers will not need to provide documentary evidence, but will need to write a short statement saying why the policy was mis-sold. No charge will be made for making a claim (other than by pop-up claims handlers who are probably worming their way up right now), and all claims must be received by 30 August 2014. Note that making a claim will cancel any policies still in existence, so those receiving benefits might want to think carefully before jumping on the bandwagon. Anyone who thinks they should be entitled to claim, but who does not receve a claim form by the end of February should should contact CPP on 0800 083 4393.
Anyone entitled to compensation will have the premiums paid since 14 January 2005 returned, less any sums paid out under the policy, but plus interest. Any premiums paid before that date are lost because such policies were unregulated before then (so providers could essentially do what they liked.)
The banks and card providers who have agreed to provide compensation under the scheme are as follows:
Bank of Scotland Plc (part of Lloyds Banking Group)
Barclays Bank Plc
Canada Square Operations Limited (formerly Egg Banking Plc)
Capital One (Europe) Plc
Clydesdale Bank Plc (part of National Australia Group Europe)
Home Retail Group Insurance Services Limited
HSBC Bank Plc
Morgan Stanley Bank International Limited
Nationwide Building Society
Santander UK Plc
The Royal Bank of Scotland Plc
Further information about the scheme is available by calling the dedicated helpline on 0800 083 4393 or on www.cppredressscheme.co.uk
Nuisance phone calls, texts about PPI, mountains of ads through your door – direct marketing has gone haywire recently, and the Direct Marketing Commission says the industry needs a complete overhaul.
The DMC has found huge amounts of phone calls and texts were made by direct marketers in the last year, and that companies were overstepping the mark with the sheer volume of pestering messages they were sending.
And it’s not just the nefarious ways direct marketers try to contact us, it’s how they got our information in the first place. Who gave them your mobile number so they could bombard you about personal injury claims?
Well, a lot of companies are very shady indeed about where they’ve accessed personal data. George Kidd of the DMC said: ‘It’s not acceptable for businesses in this sector not to be able to explain where their data and the permissions on its use came from – or for firms to dupe those they mail and call with mock surveys and ‘research’ – that open the door to sales and marketing calls, texts and emails from total strangers.’
At the moment, Ofcom and the Information Commissioners Office have shared responsibility over the telemarketing industry, but the DMC thinks there should be a separate regulator to tackle the problem of unwanted emails and texts.
May I suggest ‘FuckOffcom?’
If you feel deluged by PPI pipsqueaks and recorded message junk calls, then here’s why. According to government figures, there are 2 million nuisance calls in Britain EVERY DAY.
Last year, 30 million of us were contacted about misold PPI, but in a separate survey of around 5000 people by the Citizens Advice Bureau, it revealed that personal injury companies made the highest volume of sales calls, followed by gas and electricity suppliers and double glazing idiots.
We’re also regularly harassed by text, too, and other culprits include debt consolidation services and pension unlocking. This is despite the fact that 9 out of 10 of us wouldn’t trust these cold calling shysters anyway. (It almost makes you pine for that advert with that bloke falling off a ladder at work.)
The issue of what can be done about nuisance calls is being debated in the Commons today,with Lib Dem MP Mike Crockart demanding to have them banned. Meanwhile, Gillian Guy from the Citizens Advice Bureau said:
‘It is time companies hang-up marketing plans that bombard people with unwanted phone calls, text messages and automated voicemails. I’d like to see financial service companies banned from cold calling. A ban on these firms would help people know a call out of the blue is one not to be trusted.’
And surely the success rate of these calls must be so low that companies will have to reconsider their marketing strategy anyway? How about something more wholesome and fun? Like blimps? Or sky writing?
It’s not Santander! New figures released by the Financial Conduct Authority show that the most complained about bank between January and June 2013 was actually Barclays. Santander didn’t even come second, although they are in the top (bottom?) five.
The full details from the FCA reveal that 2.9 million consumer complaints were made to financial services firms during the first half of this year, which although high, is down by around half a million complaints from the previous six months. The second half of 2012 saw the highest number of complaints since records began being released in 2006.
The top five complained-about providers, who account for 44% of the total are as follows:
Barclays Bank Plc – opened 370,733 complaints (a fall of 11% since the second half of 2012). Of these 90% were closed in eight weeks, and 62% of closed complaints were upheld by the firm.
Lloyds TSB Bank Plc – opened 253,735 complaints (a fall of 27% since the second half of 2012). Of these, 90% were closed in eight weeks, and 62% of closed complaints were upheld by the firm.
MBNA Limited – opened 237,103 complaints (a fall of 12% since the second half of 2012). Of these, 93% were closed in eight weeks, and 36% of closed complaints were upheld by the firm.
Bank of Scotland Plc – opened 222,249 complaints (a fall of 34% since the second half of 2012). Of these, 97% were closed in eight weeks, and 45% of closed complaints were upheld by the firm.
Santander UK Plc – opened 198,736 complaints (a fall of 16% since the second half of 2012). Of these, 83% were closed in eight weeks, and 43% of closed complaints were upheld by the firm.
The things complained about were, unsurprisingly, topped by PPI.
Payment protection insurance (PPI) – 1,786,626 complaints opened (61% of new complaints).
Other general insurance – 313,860 complaints opened (11% of new complaints).
Current accounts – 280,711 complaints opened (10% of new complaints).
Credit cards – 164,134 complaints opened (6% of new complaints).
Savings (including cash ISAs) and other banking products – 97,733 complaints opened (3% of new complaints).
Our friends over at Which! were pleased to hear about the falls in complaints, but highlighted the fact that banks only have to report complaints which have not been resolved by close of business on the working day after they are received. Also, complaints to the Financial Ombudsman Service, where complaints fail to be resolved with the banks directly, were up by 179% in the first quarter of the financial year 2013/14 from the same period last year, with 159,197 new complaints lodged.
So does your bank take good care of you or is it just better at clearing complaints inside two days?
The Financial Ombudsman Service (FOS) said new complaints rose 15% to 327,035 between January and June, which was helped along by a 26% increase in complaints about payment protection insurance (PPI).
The ombudsman said lenders were still dragging their heels on repayments to customers, causing “long waits and unnecessary delays.”
Complaints about Lloyds Banking Group were nearly five times higher than this time last year, while Barclays’ complaints were up 81% on a year earlier. RBS were responsible for 22,940 complaints while HSBC saw 18,444 complaints lodged against them.
FOS chief executive Natalie Ceeney said: “Disappointingly we are still seeing cases where businesses are not following our long-standing approach to PPI, resulting in long waits and unnecessary delays for consumers. But, more positively, we are seeing encouraging signs from some major businesses that are starting to recognise the value of getting things right for their customers – with an increased focus on sorting out problems and concerns as quickly as possible.”
It’s official – we don’t trust financial services firms, and we’re also getting more confident about complaining to them. Complaints to the Financial Ombudsman have risen by 92% in the last year. Ok, so most of the complaints are in response to those not-at-all irritating recorded message phone calls about missold PPI – but even so – that’s a lot of dissatisfaction.
It’s the latest indicator that most of us aren’t happy with our banks, and that we don’t want to be hit with extra charges and bad customer service when most of us can’t even afford fabulous luxuries like cheese and shoes for the kids. The general distrust caused by the financial crisis has meant that customers are angry, and if necessary, will take their complaints to a higher level than before.
Chief Financial Ombudsman Natalie Ceeney said: ‘We have seen a much stronger consumer voice in the last year, with people becoming more aware of their rights and less willing to put up with poor customer service.’ So much so, in fact, that the Financial Ombudsman Service might have to take on 1,000 extra staff.
The big high street banks, however, aren’t upping their game, despite there being a record breaking half a million official complaints lodged through the free Ombudsman service in 2012-13. Compensation payments have been particularly difficult to prize out of financial companies, with 1 in 4 initial complaints turning into formal disputes.
Even so, I would say that we’re all being quite restrained, considering how royally most people have been shafted. Instead of going through the Ombudsman, it’s a wonder we’re not all leaving parcels of flaming excrement outside Barclays, instead.
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.”