Banks Still Failing With PPI Claims!

by Mark Johnston

Banks Still Failing With PPI Claims!

Payment protection insurance (PPI) was an insurance sold alongside loans and credit cards. Many customers have only later discovered they did not need the cover, or would have been unable to claim on it.

Therefore in a vast numbers of cases the insurance was merely nothing more than a lucrative money spinner for banks.

It appears that the level of confidence in financial services has eroded and people are becoming more aware of their rights and less willing to put up with poor customer service.

Estimates suggest banks currently face a compensation bill of £13 billion, rising as high as £25 billion.

The banks have insisted that they are tackling the problem head on!

However, figures published by the Financial Ombudsman Services (FOS), the organisation which settles disputes between consumers and financial businesses, revealed that  some 266,228 claims for payment protection insurance (PPI) mis-selling were referred to the service in the first six months of the year. That was a 26 per cent increase on the previous six months.

Research shows that the big four banks accounted for 62 per cent of all complaints the Financial Ombudsman Service (FOS) received, up from 52 per cent last year.

Richard Lloyd, the executive director at  Which?, who offer consumers independent advice on a variety of subjects,  said “The shockingly high uphold rates on PPI claims exposes just how shoddy the complaints handling is at some of the major high street banks.”

It seems then that many banks are still dismissing tens of thousands of valid claims in the hope that most consumers will give up rather than go through the further chore of taking their case to the ombudsman.

Therefore, Martin Lewis, founder of website MoneySavingExpert, has urged customers who have had their payment protection insurance (PPI) compensation claims turned down by the bank to take their complaint to the free Ombudsman or resubmit their grievance to the bank.

As a result of the advice given by Martin Lewis, new figures show more than 10,000 people a week are escalating complaints about mis-sold payment protection insurance (PPI) to an independent adjudicator after being rejected by their bank.

Data shows that for some banks up to 97 per cent of claims they rejected were later found to be valid by the ombudsman.

Martin Wheatley head of the Financial Conduct Authority (FCA) has recently announced that Britain’s biggest banks face more fines and punishments for failing to deal with payment protection insurance (PPI) claims effectively.

Action has already been taken against Lloyds Banking Group, they were fined £4.3 million in February this year for delaying payment protection insurance (PPI) compensation to 140,000 customers. Now it appears that two other banks face fines for fobbing off an “outrageous” proportion of payment protection insurance (PPI) complaints.

Many industry experts believe that the Financial Conduct Authority (FCA) must take tough action against any bank found dragging its feet in settling complaints.

Therefore in conclusion it is time for a big change in banking, with banks that work for customers, not bankers!

 

 

 

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