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41,874 Complaints To Lloyds About Insurance In Just 6 Months

admin — Fri, 27 Aug 2010 09:51:42 +0000

Lloyds Banking Group have admitted they received 41,874 complaints about their insurance products in the first six months of the year. The majority of the complaints were about mis-sold Payment Protection Insurance (PPI).

36,121 of the complaints about insurance to the Lloyds group, related to insurance products sold by the HBOS division. 68 per cent of the complaints to the HBOS division, which includes the Halifax, Bank of Scotland and Intelligent Finance brands, were upheld, suggesting a significant problem with its insurance products.

In the figures released yesterday, Lloyds revealed it had received 288,717 overall complaints in the first half of the year, equivalent to a shocking 1,850 each working day.

The number of complaints received relate to all of the brands in the Lloyds Banking Group, which include the aforementioned HBOS division brands as well as Lloyds TSB and Cheltenham and Gloucester.

Lloyds TSB received the highest number of complaints for any of the brands in the group, with 103,686 complaints made about the bank’s services across the six months.

The number of complaints made to the Lloyds Group were described by consumer group, Which? as ‘disappointing’.

A Lloyds Banking Group spokeswoman said: “Our relationship with our customers is at the heart of our business and we take all feedback very seriously.

Like every organisation we know there are areas where we can improve and we’re working with our customers to do just that.”

The spokeswoman added that the number of complaints should be seen in context, as the group has more than 30 million customers.

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FSA’s New PPI Rules Could See Refunds Of Almost £3 Billion

admin — Wed, 11 Aug 2010 10:07:56 +0000

Nearly three million people with Payment Protection Insurance (PPI) policies could be in line for compensation totalling almost £2.7 billion.
There is expected to be a flood of complaints after the Financial Services Authority (FSA) issued new rules, yesterday (10/08/10), on the way firms should handle complaints about mis-sold PPI policies.
Prior to the new rules set out by the FSA, many firms were automatically rejecting mis-sold PPI complaints, leaving customers to have to turn to the Financial Ombudsman Service (FOS) to resolve their complaints. The FOS has revealed it has received more than 100,000 complaints about PPI already, with nearly 2,000 of these, received in the last week alone. Four out of five cases taken to the FOS were decided in favour of the customer, with the firm selling PPI, having to pay compensation typical of around £1,500.
The FSA has said “Data (received from 18 major sellers of PPI) shows that on average, firms reject almost half of the PPI complaints they receive, but some reject nearly all. Around 30% of rejected complaints go on to the ombudsman, where more than 80% are overturned in the consumer’s favour.”
It is estimated that the number of complaints about PPI will rise to around 550,000 a year for each of the next five years as a result of the FSA’s new rules.
Citizens Advice debt policy officer Peter Tutton said: “We welcome the fact that the FSA is taking firm and appropriate action to get to grips with the harm done to consumers by widespread mis-selling of PPI over many years. Evidence from our CAB network has consistently shown that too often consumers have been mis-sold PPI policies that are far too expensive and completely unsuitable for their needs, often contributing to debt problems. A huge step to restoring consumer confidence is ensuring that people who complain get a fair hearing and proper redress. Up until now, firms have too often handled complaints very badly, so FSA action to spell out to firms what is expected of them was absolutely necessary.”

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New PPI Clampdown Measures Announced By FSA Will Cost £3.2bn

admin — Tue, 10 Aug 2010 13:50:26 +0000

The Financial Services Authority (FSA) estimates the cost of its clampdown on Payment Protection Insurance (PPI) could rise to £3.2 billion.
The FSA had previously estimated it would cost £3 billion to reform the PPI market. These cost estimates have been revised as the FSA expects the number of complaints to firms selling PPI will receive to rise due to new sales measures being implemented.
It is estimated firms are likely to receive an average of 550,000 complaints this year rather than the 500,000 complaints estimated by the FSA in its consultation paper on the PPI sector in March.
The new measures introduced to the PPI market will ensure customers receive better information when purchasing PPI and that they are treated more fairly, should they have to complain about the product. Firms selling PPI have until 1st December 2010 to comply with the FSA’s new measures for the sale and complaints handling relating to PPI.
The FSA has said firms could bear costs of between £1.1 billion and £3.2 billion as a result of the measures, with complaints handling procedures to be introduced as part of the rules, making up £800 million to £1.3 billion of the costs.
FSA director of conduct risk Dan Waters said: “With this package of measures we’re confident we can mend a market that has been broken for too long. This remedy is fair to consumers and the industry alike. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.”

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FSA Announce New Measures Designed To Reform PPI Market

admin — Tue, 10 Aug 2010 11:36:26 +0000

The Financial Services Authority (FSA) has announced a package of measures designed to reform the Payment Protection Insurance (PPI) market.

The FSA has said the new measures will ensure customers receive better information when purchasing PPI and that they are treated more fairly, should they have to complain about the product.

The package of measures includes a new handbook, that will ensure complaints are handled properly and readdressed fairly where appropriate. It will also explain when and why firms should analyse their past complaints, to identify if there are serious flaws in sales practices that may have affected complainants and even non-complainants.

An open letter will also be put together by the FSA setting out common sales failings to help firms identify bad practice.

Firms must implement the FSA’s new measures by December 1st. They must use the time between now and December to ensure staff selling PPI are trained to a higher level. The FSA has said it will be monitoring firms closely to ensure the new standards are adhered to.

Dan Waters, director of conduct risk at the FSA, has said that with the new measures, consumers will be treated fairly whether they are buying or complaining about PPI.

He said: “Since we took over the regulation of PPI we’ve carried out 24 investigations and three thematic reviews, issued warnings, halted the selling of single premium PPI with unsecured personal loans, visited over 200 firms, and handed out some very significant fines of approximately £13m. Now, with this package of measures we’re confident we can mend a market that has been broken for too long. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.”

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Tesco Bank Expose PPI Customers To Fraud

admin — Fri, 30 Jul 2010 15:40:10 +0000

Tesco Bank has lost the personal details of dozens of customers complaining about PPI.

39 customers who were in angry dispute with Tesco Bank over mis-sold Payment Protection Insurance (PPI), have had papers containing names, addresses and account details lost, leaving them exposed to a risk of fraud.

The customers’ details have been lost after the data was sent unprotected using the standard postal service.

It is understood the details of the 39 customers have been lost in the post between offices from Manchester to Glasgow.

Tesco have blamed a service provider for the data loss. A Tesco Bank spokesman said: ‘Tesco Bank and the service provider have robust rules and procedures for handling customer information.

‘There is no record of the correspondence being sent by courier or recorded delivery. That leaves the possibility that it was sent by standard mail, contrary to ours and our suppliers data handling procedures.

Prior to the data loss, the customers had been in the process of complaining to Tesco Bank about PPI on which they could not make a claim.

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PPI Complaints Set To Increase In 2010/11

admin — Thu, 29 Jul 2010 14:54:32 +0000

PPI complaints look set to rise in 2010/11.

The Financial Ombudsman Service anticipates complaints about Payment Protection Insurance (PPI) will continue to rise for the period 2010/11, after there were 13,520 new complaints in the first quarter alone.

These figures were published today in Ombudsman News.

For the period 2009/10, the Financial Ombudsman Service received a total of 49,196 complaints about PPI. If PPI complaints continue at a steady pace, then total complaints will reach 54,080 for the period 2010/2011.

According to the figures published in Ombudsman News, 34 per cent of all complaints received by the Financial Ombudsman Service in April, May and June, were about PPI.

The Financial Ombudsman Service has said it will be using Ombudsman News to publish snapshots of its workload on a quarterly basis.

A statement released by the Service said “This should make it easier for everyone to see the numbers and trends as they emerge throughout the year rather than only seeing the figures annually, after the financial year has ended.”

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Competition Commission Discuss Changes To PPI

admin — Thu, 29 Jul 2010 10:26:26 +0000

Competition Commission makes provisional decision on retail PPI remedies.

The independent public body, the Competition Commission has today (29/07/10) released a report consulting on changes to the way retail Payment Protection Insurance (PPI) is sold.

Retail PPI is one specific product in the overall PPI market. Retail PPI relates to protection policies taken out on repayments for goods bought from home catalogues.

The Competition Commission is looking to clamp down on the way retail PPI is sold. The document published today puts forward a number of proposals for retail PPI that aim to provide clearer information to customers on the cost of retail PPI cover and the rights they have.

Proposals for retail PPI published in the report include:

- an obligation to offer PPI separately from merchandise cover if both are offered as a bundled product

- an obligation to provide information about the cost of PPI and ‘key messages’ in marketing materials

- an obligation to remind all active customers of their cancellation rights and of key messages on an annual basis

- a prohibition on the sale of single-premium PPI policies and on charges which have a similar economic effect

- an obligation to provide customers who have spent more than £50 on retail PPI premiums in the preceding 12 months with a written annual review of PPI costs

The Competition Commission is now inviting comments on its proposals for retail PPI before publishing the final verdict for the entire PPI market in September.

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FOS Figures Show PPI Most Complained About

admin — Wed, 28 Jul 2010 11:11:05 +0000

PPI has topped the list for complaints to the Financial Ombudsman Service (FOS)

The FOS has published quarterly data for the first time, which shows inquiries about Payment Protection Insurance are the biggest source of complaints.

Figures show there were 13,520 complaints about PPI in the first three months of the financial year, with 81% of these resolved in favour of the consumer.

The number of complaints about PPI were more than twice the amount of complaints about current accounts, which was next on the list with 5,420 complaints. Third on the list was credit card accounts, with 4,296 people making queries.

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PPI No Longer To Be Sold By Lloyds

admin — Tue, 27 Jul 2010 12:57:10 +0000

Lloyds ends sale of PPI.

The Lloyds Banking Group has announced it will no longer sell Payment Protection Insurance (PPI) on all of its loans, credit cards and mortgage deals.

A spokeswoman for Lloyds said ending the sale of PPI is due to increased regulation on this type of insurance.

PPI has been the subject of long running criticism due to the way it has been sold. The sale of PPI policies are now being restricted by the Financial Services Authority (FSA) and the Competition Commission.

Lloyds is the first bank in the UK to make the decision to stop selling PPI policies. The Lloyds group has said this decision will extend to all of its brands including Halifax, Bank of Scotland and Cheltenham & Gloucester.

Instead of selling PPI cover, if customers are interested in taking out an insurance policy, Lloyds will offer them a British Bankers Association (BBA) advisory leaflet.

Martin Lewis from consumer website moneysavingexpert.com was among those happy about the decision, he had to say:

“This insurance, which has been scandalously mis-sold for years leaving many consumers in misery, is estimated to be worth up to £5bn a year for the industry

It can provide useful protection to people if they are sick or lose their jobs as it covers their repayments, but people should go to competitive standalone insurers rather than banks.

That’s because they sell it at four or five times over the odds, often without checking suitability, meaning many have been duped into paying a hidden £1,000 extra on policies that are worthless for them.”

Which? chief executive, Peter Vicary-Smith echoed his views. “Lloyds decision to stop selling PPI is a huge victory for consumers. Hopefully other banks will follow suit and we’ll finally see the back of this poor protection product” he said.

Experts predict Lloyds decision to stop selling PPI will cause many more High Street banks to follow suit.

Lloyds has said existing customers who have taken out policies or those in the process of doing so, will not be affected.

Have you been mis-sold PPI? We can think smarter and claim back your mis-sold PPI payments. Apply online to find out more, you could be owed thousands of pounds.

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FSA Fines PPI Broker

admin — Fri, 09 Jul 2010 13:19:03 +0000

Payment Protection Insurance broker fined by FSA.

The Financial Services Authority (FSA) has today (09/07/10) fined David Head, director of Essex based mortgage and insurance broker network, FT Compliance Services Limited for Payment Protection Insurance (PPI) failings.

The FSA fined David Head, £10,500 for failing to properly supervise insurance brokers who had close links with a firm previously disciplined by the FSA the mis-sale of PPI.

David Head was responsible for insuring FT Compliance Services and its appointed representatives complied with FSA regulation. Head however failed to put in place systems and controls to ensure the appointed representatives made suitable recommendations, exposing customers to the risk of purchasing unsuitable PPI.

Investigation by the FSA found that in cases where single premium PPI was sold:

- Appointed representatives were not properly considering customers eligibility for PPI before making a recommendation

- Customers were not asked about medical conditions or any existing insurance cover that could make PPI unsuitable for them

- Customers weren’t being told they could buy PPI from other providers which would be more suitable for their needs

Margaret Cole, the FSA’s director of enforcement and financial crime said: “As a director of a network, Head was personally responsible for ensuring that the appointed representatives were properly supervised and he failed to do so. His failure is particularly disappointing given that he was on notice that two of the appointed representatives had links with a person previously disciplined by the FSA for PPI failings. There is a serious responsibility attached to being an FSA approved person and Head’s fine demonstrates that we will not tolerate failure to deliver on that responsibility.”