Posted: 19th January 2018
The commercial banks are supposed to be the helping hands for the customers facing financial difficulties. Ideally, they are supposed to guide people through the issues they have been facing while dealing with their finances. However, the latest PPI scam of the country has revealed the opposite. As billions were taken from the customers during the scam, majority of the culprits included major high-end commercial banks functioning in the economy. These banks gave in to greed and tried to pull in as much money as possible from unsuspecting customers. After the scam was exposed, these banks received a lot of flak. The complaints started pouring in and the amount to be compensated to the customers has kept on increasing since then.
Mirror Mirror On The Wall, Who Is The Most Mischievous Of Them All?
Of all the major banks in the country including Barclays, HSBC, Natwest, RBS and many more, Lloyds has been reported to be the most mischievous. On an average, four out of five cases of mis-sold PPI claims are made against Lloyds. This has also resulted in the bank setting aside billions only for settling PPI related claims. Especially after the claims deadline getting postponed, Lloyds among other banks has been facing difficulties in setting aside an even larger sum of money for compensation. The financial companies have been doing their job decently by making sure that the complaints are evaluated and solved as quickly as possible. However, the ever-increasing volume of complaints has made it difficult for them to cope up with the same. Managing their own company finances, handling the amount of money to be used in other important aspects such as development, promotions etc. and then looking after the compensation to be paid to the mis-sold customers makes it difficult for the banks to function smoothly.
Banks Are Still Failing To Deal With PPI Claims Fairly
Financial companies are still failing to deal with customer complaints properly, judging by the latest figures from the Financial Ombudsman. They also reveal that the numbers of complaints about mis-sold PPI remain high while there continue to be an alarmingly large number of decisions ruled against some financial institutions. The banks have repeatedly faced accusations that they have compounded their crimes in the biggest scandal ever to hit the industry by using delaying tactics to try to wear people down in the hope that they give up their claims. Previous Ombudsman figures have highlighted Lloyds Bank as one of the worst for using this tactic, and recent figures reveal that 78 per cent of the complaints against the bank were upheld between July and December 2015.
That is the same upheld rate as in the first six months of the year, but actually higher than the 74 per cent of complaints upheld against the bank between July and December 2014. This suggests Lloyds is making even less of an effort to fairly deal with customers looking for the compensation they are entitled to.
However, it was not just the banks who have been slacking in making repayments. The card companies involved in the scam are smartly following the banks’ foot-steps of trying to save money by delaying payments. When the cases against Capital One went to the Ombudsman, it was charged guilty 74% of the times, which resulted in the company paying a huge compensation amount. On the other hand, the Bank of Scotland had lesser complaints help against the bank, in spite of having received the maximum individual complaints in the beginning.
The figures reveal there were 92,667 new PPI complaints in the last six months of 2015, almost the same as the previous six months when there 94,091. However the number of complaints about financial companies taken to the Ombudsman fell slightly in the second half. It took on 164,347 new cases, a fall of 6 per cent from the first six months of the year. Looking at the inflow of complaints over the past few years, this data is far from satisfactory. Commercial banks and other financial companies are using delaying tactics in order to save themselves from getting drained out of funds, which is clearly unethical. They should realise as soon as possible that such delays would never save them from the money they have to spend to settle legitimate PPI claims. No matter what, the banks and other financial institutions are legally obliged to pay the compensation of every single mis-sold buyer. The companies are already in trouble due to increasing complaints and claims, and they definitely don’t wish to add to this disastrous burden.
Delaying the claim settlement process is not the only tactic used by the companies to avoid repayment of compensation. Certain banks also ask their customers to return a part of their compensation citing calculation errors. Such practices are highly criticised by the customers as well as the media. It is a fact that the companies have been facing a money crisis recently, but that doesn’t really give them any right to further manipulate the customers and cause delays inrepayment.
FOS Trying To Speed Up The Resolution of PPI Claims
The Ombudsman has been keeping a keen eye on the entire issue and has been trying to speed up the process. The Ombudsman has always served as the last resort for solving any PPI case. Though the body is capable of solving all the cases by itself, it always recommends solving the case by talking to the lender themselves. In spite of this, the Ombudsman has been receiving tonnes of complaints almost on a daily basis. A lot of this is due to the slacking of commercial banks and other lenders of the policy. The conditions can get worse if the companies are not clearing their cases before the final official date for making PPI claims set by the FCA, which is not more than two years from now. Indeed, it is high time the financial companies realise that there’s no escape from paying for the financial blunder committed by them years ago!