Are Banks Trying to Dodge PPI Claims?
Are Banks Trying to Dodge PPI Claims? We take a look.
With payments for mis-sold payment protection insurance (PPI) averaging around £3,000, people looking to make a claim may be dismayed by suggestions that some financial institutions might be trying to evade payouts.
That’s the claim from the Alliance of Claims Companies (ACC), which has reported a growing number of “lost” customer files at Britain’s banks and other financial institutions that result in PPI claims being stalled or outright rejected.
PPI refunds and compensation started being made in January 2011 after it was discovered that UK financial institutions were engaged in unfair practices in attaching PPI policies to unsecured loans, mortgages, credit cards and car financing.
It was often done without people’s knowledge, or they felt pressured into paying for the products as a condition of getting the loan, car or financing.
This brought about the prominence of claims software and management companies, as the dodgy dealings of banks suddenly created a platform for businesses to assist people in earning back the money they were owed.
Files ‘Gone Missing’
Now, the AAC has obtained figures showing that seven large financial firms are experiencing soaring cases of their customers’ PPI data going astray.
The biggest alleged offender is motor finance firm Black Horse, which is part of Lloyds Banking Group.
In January this year, there was no apparent difficulty with customers’ files, but by April, ACC members handling claims — many using claims software to deal with large volumes of them — were told by the firm that it was “unable to locate customers’ details” in 80% of cases.
At Lloyds Banking Group, the percentage of missing customer details was 5% in January and had risen to 35% by April, according to the data, while HSBC was 6% at the start of the year, but had shot up to 42% four months later.
MBNA went from 7% to 28% in the same period, Barclays from 8% to 30% and and HBOS (also part of Lloyds) recorded a slight drop from an already high 38% to 36%.
The banking sector said it was dealing with all customers’ PPI claims as fairly, efficiently and quickly as it was able to. But ACC chief executive Simon Evans lashed out at the sector for trying to “wriggle out of ending this rip-off for customers”.
“Our members don’t charge any upfront fees, so it is not in our economic interest to submit claims which have no chance of succeeding; it is all aimed at discouraging people from progressing claims,” he said.
He added: “I am of the view there has to be an element of collusion among the banks. It can’t be an incredible coincidence that they have all seen a spike.”
Big PPI Business
The figures for PPI claims are nothing short of astonishing.
Tens of millions of policies were sold and to date, with an enormous £27.4 billion paid out by the financial firms in refunds and compensation — £260 million in May this year, according to the most recent figures.
Now that PPI claims are due to end in August 2019 and a large ad campaign advising people to check if they have been mis-sold PPI will soon start airing, a new flood of claims is sure to be triggered.
Consumers can make their own PPI claims applications, but as a new Which? survey shows, most people prefer to use claims management companies.
This is due to their expertise in the area and their use of claims software to quickly deal with cases and get people the refunds and compensate they are due.
Which? found that many people — more than half of those surveyed — were bamboozled by the reams of complex paperwork involved in PPI claims and thought the process was far too difficult to do it themselves.
They believed claims firms, equipped with ever-improving claims software, would do a better job and letting them handle their claims would make their lives much easier.
Latest posts by Paul (see all)
- DWP Report: Now We’re Retiring Younger Than Ever Before - September 15, 2017
- It Is Time To Make Our Businesses More Eco-Friendly - September 11, 2017
- Algo Performance Fund Offers Hassle Free Currency Investment - September 8, 2017
- How To Secure Funds For Your Business Venture - September 5, 2017