Banks Still Need To Improve Handling Of PPI Complaints
Banks have been warned they still need to improve the way they handle Payment Protection Insurance (PPI) complaints.
The Financial Services Authority (FSA) has complained too many people are being forced to take their mis-sold PPI cases to the independent Financial Ombudsman Service (FOS).
The FOS, which acts as a mediator between customers and their banks, still receives up to 1,000 complaints a week about PPI and upholds 90% of these cases in favour of the customer.
Emma Parker from the FOS said “Banks still need to improve the way they handle PPI complaints. We will continue to work with the regulator where we see banks treating customers unfairly.”
The Competition Commission announced earlier this year customers would have a 7 day cooling-off period, allowing them to shop around for PPI and not feel pressured by banks and building societies to take out a policy at the point of obtaining finance.
Vera Cottrell of Which? said “Banks have been warned countless times by the FSA and the Ombudsman about PPI complaints and it is incredibly disappointing that they are refusing to implement the FSA’s guidelines. Banks are wasting everyone’s time by automatically rejecting so many complaints — the vast majority of cases should not have to go to the Ombudsman.
The FSA is currently in the process of putting together tougher new rules regarding the way PPI is sold and how mis-sold PPI complaints should be dealt with by banks.
A spokesman for the FSA said “We remain firmly of the view that the PPI market is broken and needs to be fixed. We are committed to bringing about genuine, lasting change, and the package of measures we hope to finalise this summer will go a long way to address this.”
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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The new PPI Claims Process
The new PPI Claims Process
The Financial Ombudsman has pushed through the new process for handling PPI Claims for both Consumers and businesses that receive complaints about mis-sold PPI. This process has been designed to help the Ombudsman handle complaints that have not been resolved between the two parties and have reached deadlock.
The new forms for the consumer capture all the information required for the bank and Ombudsman to understand the prejudice the customer may have endured at the point of sale. There is no denying that PPI is a poor product that did not help the people that needed it the most. The banks know this, the FSA know this, but PPI was pushed on millions of people by highly bonused sales people and the mis-selling was rife.
Hopefully the new consultation can go ahead and the banks can start to act properly when making redress to customers. I do not think for one minute that any ethics in terms of what they have done (including the ethical bank CO-OP) have been put on the table, with the analysts working around the clock to reduce liability the more likely event.
With this in mind, it is likely that the levels of PPI Claims will increase to levels that will never be surpassed by any other mis-selling claims. There are millions of policies in existence and the levels of compensation have been estimated in the billions. Most people will know of someone with a PPI Claim on a loan or a credit card. Credit Card PPI is likely to be very high in terms of the redress available where the banks cannot prove how the insurance was sold if there records are not robust enough.
With the levels of claims management companies increasing, the awareness of PPI will inevitably increase as more media and internet search marketing will increase. This should see the word of mouth for PPI Claims increasing, which will perpetuate the levels of claims. It has been anticipated that the peak will be in 2012 and should return to zero within 5 years.
I will call this now; you can expect a time bar on making claims when the banks and the FSA have worked out their liabilities, which will be based on their learning over the coming year. They will create this time bar at the best possible point to reduce any redress that will be available. I really hope this does not happen.
PPI Claims will increase, so if you have not made your claim yet, please visit www.ppi.co.uk and make a claim
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