PPI Claims Still Sailing Into The Wind

21/05/2011 by admin.

After 6 months of wrangling the British Banks have now conceded and will start processing Payment Protection Insurance (PPI) claims once again.In October 2010 the banks represented by the British Bankers Association (BBA) started groaning about new rules governing the way PPI complaints must be handled.The British Bankers’ Association then launched a Judicial Review through the High Courts against the Financial Services Authority and the Financial Ombudsman Service over new regulations that came into force in December 2010.

The rules aimed to ensure consumers are treated fairly, both when they buy PPI and when they complain about being mis-sold the cover. To ensure people understood what they were buying, providers would have to talk potential customers through the key features of a policy, rather than just provide them with a document giving the information, as was previously the case. Surely, that is the right thing to do anyway, and the least loyal banking customers deserve?UK banks complained as this recommendation was retrospective, and claims going back 6 years that had previously been rejected at first hand, would now have to be reopened. Talking about reopening old wounds !Over the last couple of weeks estimates have grown wildly as speculators from both banks and consumer rights camps have taken a stab at the potential final compensation tally. Some pitch it as high as £8bn, an astounding figure given how many hospitals that could buy or put quite simply a cheque of £1333 to every man, woman and child in this country.

But it was wrong, and now it needs to be put right, there is no argument there.Just because banks have stated they will not contest the ruling, does not mean they will roll over and payout compensation for all PPI complaints. You would have to be very naive to think so. There are still banks profits, bonuses and shareholders to consider.

Now we have an ideal situation for banks to consider setting up “think tanks” sitting around formulating ways in which to delay the PPI claims process, and to be honest with 5 years of comical regulation enforcement that is not difficult.

1.    The No1 excuse - Dealing with the backlog of 6 months of all PPI claims being put on hold. Same amount of staff and now a mountain of PPI claims to deal with. “Sorry Mr Customer your claim will take at least another 6 months to be dealt with”. 

2.    Keep rejecting claims anyway -Why not? Once rejected a claim can only go to the Financial Ombudsman who is so snowed under with previously rejected PPI claims, they are now sending out letters stating any new claim may take “up to a year” to be considered. 

3.    Make the claim even tougher to process - An easy but well trodden path. For every piece of paper you send to your bank, they will send you back 2 more to complete. Eventually you just give up and the claim stops. Public lethargy is a wonderful thing when its on your side. 

4.   And finally, lets team up with a Consumer Champion and declare we are now the good guys and open for business. Barclays have now teamed up with Which Magazine. The Chief Executive of Barclays UK Retail Banking stating “We are firmly focussed on resolving complaints from our customers”. Excuse me, aren’t you the same people who were the most complained about bank during the first 6 months of 2009, with a staggering 12% of the total complaints made about the financial services industry? (source The Independent 15/09/2009).And to top it all both Barclays and Which Magazine are now encouraging the public to avoid Claims Management Companies (CMCs) and complain to banks direct.Hardly surprising Barclays are promoting this, as its the Claims Management Companies who have highlighted this PPI misselling atrocity and taken the fight to the banks in the first place. Confused over how to claim for missold PPI? Here is our rough guide:

1.    Check your mortgage or loan agreement. If you have PPI attached to it consider making a claim. 2.    If you have the time, are happy to play ping-pong with your bank, wait for up to a year for your claim to be reviewed then claim direct with your bank. Remember if your PPI claims are rejected (which is still very likely) you may have to complete more forms and take your claim to the Financial Ombudsman who may take another year to review your claim 

3.    Consider using a Claims Management Company (CMC). A good Claims Management Company will deal with your claim beginning to end and keep in contact with the bank and Financial Ombudsman saving you a lot of hassle and time. All reputable CMC’s must be authorised by the Ministry of Justice and show their authorisation number (beginning with CRM) on their web site. 

Beware some CMC’s charge upfront fees and completion fees anything from 15%-38%. Search the web. Nowadays you can find some with a low 15% success only fee with no hidden charges. For every £1000 you could claim, getting £850 in your pocket for something you never expected in the first place is well worth it, and will save you a lot of time and headache.  Whatever you don’t do, don’t do nothing. The banks are wrong.

This is a clear consumer rights issue, which for once has gone in the consumers favour. It’s time to get your money back.

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