Commercial Banks Accused Of Selling PPI To NHS Workers


Posted: 26th January 2018

Recently, the commercial banks have been slammed for making pointless sales of PPI policies to the workers of National Health Service (NHS). According to the reports, the workers were mis-sold the policy saying that there will be no redundancies in the future that would be mandatory. There are thousands of such health board employees which are affected by this massive mis-selling of the policy. A former banker at Clydesdale, Mike Begg, claimed that he had been dealing with numerous complaints from the affected customers working at NHS, regarding making claims for their respective PPI refunds. Majority of these workers have been adversely affected by these policies in spite of having a firm job security. It is clear that the workers can’t be sold a redundancy cover if the lender can’t be made redundant in the first place. Mike adds in his statement that if he were indulged into selling such policies to the NHS workers while being into the lending business, he would have been given a “rocket” by his bosses.

It clearly makes no sense in selling the policy with high-end cover to NHS workers, who have 12 months of sick pay and no guarantee of mandatory redundancy. Mike also slammed the banking giant Lloyds for taking a tough stance with PPI compensation, where they were accused of pestering customers through constant phone calls as a tactic of avoiding their payouts. The clients complained saying that it was a really aggressive tactic followed by the bank and that that they felt pressurised and harassed by the calls. It was then revealed that the bank already had all the information they required about the customers. This was simply a gimmick aimed at reducing the amount of money they are supposed to pay as PPI refund to their mis-sold customers. Mike ended his statement by saying that such claims would have settled at least four years ago if they were treated in a normal way. The claims are now getting bigger, and the bank tactics dirtier.

PPI was originally meant to be sold to people for helping them in taking care of their income when they are not able to work due to unforeseen circumstances. As the banks started misusing this service and ended up mis-selling the same, thousands of customers were unethically robbed off their money over the period of years. The scam hit a new low when it was revealed the high-end commercial banks didn’t even spare the NHS workers and secretly sold them PPI. Majority of them were sold the policy along with a loan or credit, without them knowing about this. After this practise was exposed, it was tagged as ‘pointless’ due to its complete irrelevance with the need of the workers. This makes it clear that the policy was sold precisely for the purpose of earning more commission from innocent NHS workers, who had no idea that they were being manipulated by the banks they trusted the most when it came to safeguarding their financial interests. This has only ruined the image of many high-street banks in the market, which was already shaky after the unveiling of the much infamous PPI scandal!

Special Dividend Handed To Lloyds Shareholders After The PPI Blow?


Posted: 22nd January 2018

It is an open secret that Lloyds Banking Group has emerged as the most notorious in the lot in the entire PPI mis-selling scandal. It has robbed off billions from the pockets of the ignorant and innocent customers by tricking them in the worst possible manner. However, they couldn’t continue with their little game of manipulation and were made to pay a huge amount as compensation to the mis-sold buyers. The amount of the compensation turned out to be so high that it started affecting the bank’s profits and earnings on a regular basis. It cut down Lloyd’s annual pre-tax profits from £2.8 billion to £1.6 billion!

Antonio Horta-Osorio (Chief Executive, Lloyds Banking Group) thought of bringing some relief into the picture and easing down the troubles for their shareholders by giving them a one-off special dividend. Shareholders or investors are always special for any financial institution. They provide the firm with the funds required to run the operations and assist whenever they face difficulties. When the firm is facing a crisis such as the PPI issue, the shareholders are bound to doubt the institution they have put their money into. This was realised by Lloyds as soon as they started sinking deeper into the compensation payment mire. The Portuguese banker also maintained the fact that Britain is in a much stronger and longer recovery cycle than what people believe. He managed to give confidence to the mis-sold buyers as well as the nation as a whole that the UK will be back on a sound economic track in no time!

Chief Executive’s Pay Package Raising Alarms

However, the pay-package of the Chief Executive caused a lot of controversy post his decision of helping the shareholders. Though the salary fell down from £10.8 million to £8.5 million, his base salary is still reported to increase by 6 per cent, compared with a mere 2 per cent rise for the employees. Also, his bonus packages are supposedly linked with his base salary, which would result in an increase in his maximum payment in any case whatsoever. In one of his interviews, Antonio said that he is witnessing an immense growth across the sectors and regions where the bank functions. He went on to add that he is positive about the outlook of the UK economy, and given that they handle around 18 per cent of small and medium enterprises’ accounts and 25 per cent of the current accounts in the country they have a pretty good visibility. Antonio also claims that he achieved this with a much lower level of debt, which wasn’t really happening anywhere else in the world. The total debt, comprising of the personal, corporate as well as the public debt is reportedly coming down as a proportion of the GDP, which he also interprets as a recovery cycle being the longer one. 

PPI Claims Continue To Pour In For Lloyds But Share Value Rising

The exponential increase in the complaints pouring in against the bank resulted in Lloyds setting aside a specific sum of money to take care of the compensation of the mis-sold buyers. Over the years, Lloyds has set aside billions of pounds for PPI compensation payments. Still, the PPI mis-selling scandal would remain a powerful detonator. Apparently, the charge worth of £2.1 billion was taken in the last quarter of the final year and pushed Lloyds into a loss during the concerned period. After all these issues, Lloyds made a statement saying that it expects the number of claims to start rising again as the Financial Conduct Authority has imposed a deadline until which the mis-sold buyers need to register their complaints with the concerned lender.

In the previous year, the bank had been doing extremely well, apart from the PPI issue standing in their way. Last year, PPI claims cut down the bank’s profit from £1.8 billion to £1.6 billion (in spite of the underlying profit rising by 5 per cent). In another one  of his interviews, Mr. Antonio said that their income was once up one per cent to £17.6 billion, their costs were slightly down again and even their bad debt impairments were sharply down. The bad debt charge fell down to £568 million in another reflection of how the customers at Lloyds are riding the economic cycle. Finally, the bank has declared a dividend of 1.5p, taking the final total for the year to 2.25p. After getting a clearance from the Bank of England, it announced a 0.5p special dividend paid out of the extra capital above the regulator’s requirements.

After this, Lloyds’ shares jumped by almost 10 per cent or 6.05p, to 68.25p, which is their highest level since the Chancellor, George Osborne delayed the £2 billion discounted sale of shares to retail investors at the end of January. The official spokesperson of Robin Hood Tax Campaign, David Hillman, recently made a statement saying that Lloyds PPI rip-off is a never-ending story that not only hits the customers, but also the shareholders and the taxpayers. He also suggests that now is not the time for the Government to ease up the much-needed reform for the financial sector. In spite of the bank being heavily involved in one of the biggest scams, the city has still cheered the decision of increasing the shareholders’ dividend. This is probably due to the amount of money the bank has been spending over the years to make right what had gone wrong from the beginning. This is one of the few measures taken by the executives of this notorious financial institution in order to win back the trust of their internal as well external public. Investors and shareholders are the backbone of an organisation, and in times like these, there are chances of them losing trust in the institution. This is why Lloyds Banking Group took this wise decision after they were struck with the heavy blow of PPI and made sure that the people who invested into the firm get more dues even if the firm itself has to suffer by paying billions to the affected buyers.

Ombudsman Figures Prove That Banks Use Delaying Tactics While Dealing With PPI Claims


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!

Financial Companies Fail To Bring Down The Number Of PPI Complaints


Posted: 15th January 2018

Almost every second financial institution had the time of their lives a decade ago when PPI was first introduced in the market. The amount of money they were robbing off their customers was huge. When the policy was being mis-sold without the knowledge of the buyers, financial companies were swimming in profits. The amount of commission increased which further gave a boost to other activities of the concerned institution.

But as they say, “sunshine never lasts forever”.

Eventually the PPI scam was exposed by consumer groups and the media. Billions of pounds worth of PPI policies were mis-sold, which also meant that the companies had to pay back billions to the affected buyers. Majority of the affected buyers didn’t realise about their mis-sold policy initially. It took a fair amount of time for majority of the mis-sold buyers to find out about the policy they had due to the way it was mis-sold and the general ignorance of the buyers towards the product.

The whole saga has rumbled on for quite a while now and even today many people are making complaints regarding their mis-sold policies. The complaints started getting registered almost a decade ago, but new claimants are coming forward every day after recognising the fact that they had been manipulated by their financial companies. This has created havoc for the banks and other financial companies who have been selling PPI to the customers. For years, they have been trying to settle as many cases as they can. Most of the banks have set aside billions to make sure that their mis-sold customers get their compensation back. However, this doesn’t seem to be working too effectively. The financial companies, in spite of all their efforts, are not able to bring down the PPI complaints even after all these years.

Major Culprits Of The PPI Saga Based On The Ombudsmans Figures

Past Ombudsman figures have highlighted Lloyds Bank as one of the worst for using unfair settlement tactics, and recent figures reveal that 78 per cent of the complaints against the bank were upheld between July and December. Financial companies are still failing to deal properly with customer complaints, judging by the latest figures from the Financial Ombudsman. They reveal that the numbers of complaints about mis-sold PPI remain high while there continue to be an alarmingly large numbers 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 will give up their claims.

The claim upheld rate is same in the first six months of the year but actually higher than the 74 per cent of complaints upheld again the bank between July and December 2014. This suggests that Lloyds is making even less of an effort to deal fairly with customers looking for the compensation they are entitled to. Just like the high-end commercial banks, credit card companies also seem to bear the brunt of this issue as they had also been an active part of the PPI scandal. Several credit card companies have also been lethargic in sorting out the issues of their customers related to PPI. Capital One was ruled against in 74 per cent of cases taken to the Ombudsman while at MBNA the figure was 69 per cent. In contrast, while Bank of Scotland had more complaints than any other individual financial business, the number upheld against it was less than half, at 47 per cent. The compensation bill from the banks forced to repay consumers mis-sold PPI is fast approaching £30bn and despite the Financial Conduct Authority enforcing a deadline (29th August, 2019) on the number of complaints, there is little sign of a let up in the tide of fed-up consumers.

No Let-Up In The Number of PPI Claims Being Brought Forward

No matter how many claims the financial companies settle, there always seem to be an increase in the number of claims being brought forward every day. The figures reveal there were 92,667 new PPI complaints in the last six months of the year, 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. These statistics are enough to prove the fact that the damage done is huge and the financial companies are not likely to get any relief from PPI related claims anytime soon. It is easy to evaluate the amount of policies to be mis-sold during the scandal.

The sole reason behind companies not being able to reduce the number of complaints is the unreasonably huge amount of policies that were sold to the customers. Clearly, the smartness of the financial companies seems to have backfired in the form of continuous and heavy compensations. The biggest of financial institutions are now facing a little difficulty in taking care of the funds to be given to their customers. Most of them are not able to deal with the heavy expenses which are incurred in taking care the PPI issues of the mis-sold policies. Such expenses affect the normal functioning of the companies as well. I

Inspite of the companies doing all they can, they have been unsuccessful in stopping the bleeding of funds draining out on account of PPI compesations. This scenario also doesn’t seem to end at least for the next couple of years. The deadline set by the FCA might have given considerable relief to the financial companies, but at the same has also increased the current rate of complaints being filed with them. As the FCA has also taken rigorous steps in encouraging masses to check their financial products, people have become more aware and are filing complaints every other day. Due to this, the financial companies may have to set aside an even bigger amount for paying back their customers’ compensation. Certain banks tried resorting to further manipulation and tricks, but had to face vehement opposition from their customers as well as the media. The current condition of these companies is beginning to get poorer every passing month. They are indeed reaping what they sowed long back!

What To Expect In The Next Two Years Before The PPI Claims Deadline is reached?


Posted: 6th September 2017 & filed under PPI

After years of constant complaints, claims and compensations, the Financial Conduct Authority (FCA) started backing calls by the commercial banks to introduce a two year long cut-off for making PPI claims. After a lot of discussions and debates, FCA announced a final deadline for making claims related to mis-sold PPI, which is 29th August 2019.

According to Andrew Bailey, the Chief Executive of FCA, having a deadline will wake people up from the sluggish approach towards their claims. Without a deadline in place, the buyers tend to get casual and avoid approaching the institutions quickly. This deadline would prompt people to take action and check if they have any mis-sold PPI that they are not aware about. However, it is important to know that the deadline will not be applicable to everyone. Following are the areas where it will not be applied:

  • If the buyer has purchased the policy after 29th August 2017
  • Buyers who are holders of a 'live' PPI policy and they have been rejected from making a claim because of selling of the policy – such as the policy exclusions.

Also, the deadline applies to the Financial Ombudsman Services (FOS) and not the Court proceedings. Thus, the lenders and the offending financial institutions like banks and credit card companies will experience a hard time over the next two years. It is projected that the deadline along with the new Plevin guidelines will make people more active. Those who haven't checked for the policy would start checking if they have been mis-sold, and the ones who are already mis-sold the policy would start making claims immediately. Also, the lenders will be required to look for the possible victims and inform them about the chances of having a mis-sold PPI policy. They are also required to get back to the claimants who were previously rejected to make sure there is no error or further room for doubt. This would make sure that almost everyone having a PPI policy is able to make claims and get the compensation they rightly deserve.

Hence, in the next two years before we reach the deadline for making PPI claims, all the authorities will make sure that  ignorant PPI policyholders will check their policies and the affected take quick actions to get their claims. This may solve a decade long issue and struggle of claiming PPI refund and would clear the matter from all records – be it the offender or the offended.

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