Banks buckle under deluge of loan insurance complaints

[Michael Browne]

Banks buckle under deluge of loan insurance complaints

 

Big banks are being flooded with thousands of customer complaints about payment protection insurance and are managing to settle only very few cases, according to industry sources.

 

One large bank is understood to have received almost 7,000 complaints in a single week recently, and had settled fewer than ten cases. Industry insiders said that the banks were struggling to increase workforces and other resources, such as IT systems. Nonetheless, banks are doubling or tripling their complaints-handling staff in Britain, increasing the total employed across the industry by thousands in an attempt to meet the flood of complaints.

 

One insider said that the level of claims coming through the door was “an enormous challenge”, adding that one big problem was that banks were trying to employ significant numbers of staff from the same relatively limited talent pool.

 

An option being considered by some banks is to sign outsourcing contracts with Indian companies to keep costs under control and to deal with the level of complaints. Such a move might be considered controversial because some decisions about PPI mis-selling are complex and may not be resolved easily by external contractors.

 

There is a possibility, too, that customers, who already believe that they have been mis-sold a product, find themselves caught up in a frustrating process to try to resolve the issue, financial insiders warned.

 

With a final compensation bill expected to be up to £8 billion, PPI is the biggest mis-selling scandal to have hit the banking industry. PPI was insurance intended to pay loan bills in the event of the policyholder losing earnings through ill-health or redundancy, but many people were unaware that they were paying for it or were sold policies when the fine print excluded them from ever claiming.

 

Late last year the Financial Services Authority ordered banks to apply new rules to how they sell products, requiring them not only to supply customers with documents stating the terms and conditions but also to talk them through the details.

 

The change, which applied to old and new policies, led to panic among the banks as it left them open to millions of mis-selling claims over PPI, triggering protracted legal action.

 

The banks abandoned their case only when Lloyds, the biggest PPI seller, broke ranks in May and walked away from the case, earmarking £3.2 billion to pay victims.

 

Because banks froze all work on compensation claims during the legal case, since May they have been swamped with historic and new claims.

 

The logjam makes the situation different from previous mis-selling problems, when banks have been able to increase their staff over time, industry sources said.

 

The FSA has already waived the normal rule stipulating a response to complaints within eight weeks, giving banks more breathing space to deal with PPI claims.

 

A rolling programme of deadlines has been introduced, with the first date of August 31 looming for decisions on complaints put on hold while banks pursued their court case.

 

The industry believes it will take about two years to clear the complaints.

http://www.thetimes.co.uk/tto/news/

[gregorious77]

This sounds like we have to give the banks time to sort out our claims?

I am claiming at the moment and will be sending a LBA next week giving 14 days, Cap1 have already sent a letter saying it could take up to 8 weeks but I am happy to go to court, will this news give them an argument to have more time to drag there heels?

[keefyboy]

So what are the banks going to do about this.... nothing, they will just deal with it at their own usual mega slow way, and stall things. It is disgusting to say the least that one bank has only dealt with "less than 10" claims, how many less than 10 is my thought.... one.... two or three??? and the banks being told they don't have to stick to the 8 week limit is a smack in the face of the poor people who have submitted the claims... how long are they going to have to wait now... haven't the poor people been smacked in the face already ??? with the mis-selling..... and giving the banks a running time table is a joke, how much interest are the banks going to make holding back the payments to the last minutes...... millions.....

[ims21]

Hi

 

Well given half a chance the banks will drag their heels. They try all sorts....Non compliance with SAR requests to avoid giving out info, Blowing Smoke such as "it is the broker you need to contact", Out of time as over 6 years old, "we can't find any record of your account"....the list goes on.

 

And, of course, don't expect too much in the way of help from fos....ignored by the banks, wishy washy procedures, little in the way of teeth, long waiting times etc etc.

 

Once again we see a complete system which, to some, may appear geared to frustrate the consumer who are the victims in all this.

 

There is no doubt in my mind that the banks are fully to blame in all this due to their business model which is designed to screw every last penny out of their "customers".

 

The more I read and the more I think, the more I am convinced that court is becoming a far more attractive route to take a claim. It has advantages in that it is quicker, a claimant can set their own timescales and not get involved in this 16 week nonsense for an investigation and in many instances get a higher payout. That route has its downsides of course...the claimant has to front some court fees (yes they get them back if they win), they have to be confident in their claim, they have to be confident in preparing and presenting a case and they have to accept that, as in any fight, they may lose. Where a claim is for an amount which exceeds the small claims limit then the claimant also has to consider the potential issue of costs.

 

The whole thing to me is modern day "Banditry" but as long as the courts and Judges act in a responsible and fair way and adhere to the precedents set, then at least us victims have a fighting chance.

 

As Wolfie Smith put it...Power to the People.

 

Banks watch out.....the people are still coming after you.

 

Regards

 

ims

[Mr Meggo]

It's about time someone from these banks was sent to jail for fraud. The whole PPI industry was based upon deceiving customers about what they were buying. The following definition of fraud does it for me:

 

fraud

1. Wrongful or criminal deception intended to result in financial or personal gain.

2. A person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.

[keefyboy]

I agree with you 100% Mr Meggo, but the trouble is that NOONE in any sort of power position has the guts to do it, to even forward the details onto, say the Police for a full and thorough investigation, and a possible prosecution. But does anyone actually know WHO started all this misselling? I, IMO, beleive that it was banks all together deciding on this, to just line their greedy pockets and look good to shareholders and give them plenty of profits from their investment.

 

I don't know if I was mis sold PPI in the past because I have lost everything thanks to Northern Rock, who started proceedings on me for a £995 debt and forced me to sell my home. We lost everything we had invested in the house, and then we had the nasty happen this year, going bankrupt, so my opinions of the banks and other finacial institutions are of the **** kind. I would NEVER trust anything the banks said or offered, as they are doing it for one reason, PROFITS, nothing else, not for your benefit or anyone elses, just their own....

 

To anyone who is trying to get their PPI back, good luck my friends, screw them for every penny you can please......

[Armsoft]

This sounds like we have to give the banks time to sort out our claims?

I am claiming at the moment and will be sending a LBA next week giving 14 days, Cap1 have already sent a letter saying it could take up to 8 weeks but I am happy to go to court, will this news give them an argument to have more time to drag there heels?

 

My sons PPI claim through 'Un'Welcome Finance seemed to move to the front of the queue to be sorted when they received a Court Summons (he filed online at "money claim") and on the day that they acknowledged the claim they paid his outstanding PPI payment £2,300 into his Bank Account without even telling him.

 

Interestingly they acknowledged the claim at court with the standard "we intend to defend All of this claim" so it looks like he will now have to wait the extra 28days they brought themselves before he gets the interest that they owe on the claim...

 

HTH

[Armsoft]

This sounds like we have to give the banks time to sort out our claims?

I am claiming at the moment and will be sending a LBA next week giving 14 days, Cap1 have already sent a letter saying it could take up to 8 weeks but I am happy to go to court, will this news give them an argument to have more time to drag there heels?[/

 

HTH

[keefyboy]

Hi Armsoft

I do wonder if, that the lifting of the 8 weeks to settle to a sliding time scale would affect your case in court, as they could possibly argue that the FOS has given them more time because of the sheer volume of cases. You can try issuing a summons but be prepared just in case they throw this little thing back, and of course then you may have lost your first court fee....

[keefyboy]

IMOO also, I think "UN"Welcome Finance maybe trying a crafty one by just paying into your sons account the amount of PPI that he paid and hoping that people are just going to accept that back, and not realise that they are owed (I believe) 8% interest, so UNWelcome make money from us yet again.....

[ims21]

the 8 (now 16 weeks for most banks) is only relevant before fos will look at it.

 

If a claimant wishes to go the court route those timings do not apply. The claimant takes control and sets their own time scales.

 

To my mind it is a weird system...for example if you go to court and lose, fos won't take it on. If you go to fos and lose, you can still go to court.

 

Court is quick, fos is slow.....incredibly slow.

 

fos would award 8% on a loan but going to court could have a larger payout due to the possibility of claiming interest in restitution.

 

As with many things, there are pros and cons for each approach.

 

Regards

 

ims

[keefyboy]

After all the things that have gone on over the years, I have lost all faith in the FOS to do anything for the consumer. When i was going for Crap One who failed to answer my requests for all the paperwork they hold, crap one sent them a load of crap the first time, which the FOS forwarded to me, obviously not checking it first. Then when I kicked up a stink with them they went back to Crap One and told them to send the correct docs, so they sent some, but the statements of the account was missing 2 complete years of history, on the same statement page said entry at I think it was September 2005 but the next line down was a payment made in October 2007, so back to FOS again, then finally after nearly 5 months of tooing and froing to FOS I finally got what was required by law..... so its just shows that the FOS doesn't seem to work in favour of the members of public. Oh what a surprise.....

[mummybird]

Well, after three years with the Ombudsman, lloyds have agreed to a payout. i quote "Lloyds TSB has told us that it would like to make an offer as a gesture of goodwill, with no admission of liability, to settle your complaint". How much longer I will have to wait for the actual money and I don't know how much yet........ Should be about £4000

[mummybird]

Hooray, Lloyds have agreed to pay me £4800.00. Its taken 3 years. Now they have agreed, it will take up to two months to sent me a cheque. I shall keep at them.

Thanks for everybodies help.xx

mummybird

[Old Cogger]

Well, after three years with the Ombudsman, lloyds have agreed to a payout. i quote "Lloyds TSB has told us that it would like to make an offer as a gesture of goodwill, with no admission of liability, to settle your complaint". How much longer I will have to wait for the actual money and I don't know how much yet........ Should be about £4000

 

Oh dear I will have to loan them more monies to pay you also directors bonuses (we tax payers) I don!t know.?