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A good question - WHY
http://www.money-marketuk.com/index....ion&Itemid=317
The banks’ failed attempt to wriggle out of repaying payment protection insurance mis-selling victims a combined £9bn is another example of the utter contempt shown to customers. Consumers can celebrate now the British Bankers’ Association has decided not to appeal a High Court ruling that upheld Financial Services Authority (FSA) rules that force lenders to review past sales of PPI and compensate those wronged.
But the motive behind banks’ tactics is in desperate need of further scrutiny, with a charge list as long almost as long as the catalogue of methods they used to flog policies to unsuspecting borrowers. Not only did they mis-sell the insurance, most major banks (other than Santander) then put complaints on hold pending the result of the legal case.
This was in defiance of the FSA which clearly stated they must continue to process complaints on PPI – to protect loan and credit card payments if you cannot work. This has helped create such a huge back-log that most borrowers who demand compensation via the independent Financial Ombudsman Service must wait over a year.
The Ombudsman typically upholds over two thirds of PPI complaints in consumers’ favour, which highlights another abuse.
As you must first complain to your lender before involving the Ombudsman it shows far too many complaints are wrongly rejected initially.
The Ombudsman upholds over 90% of complaints against some of the worst offenders. Next up is examining why exactly banks launched the case. They claimed the FSA was wrongly asking them to apply new rules to judge the way they sold policies many years ago. Yet all the new rules do is add common-sense detail. When you consider much mis-selling happened when staff added insurance without consent or lied by telling borrowers that they’d only get a loan if they also bought cover, it does not matter what rulebook is in place – this is not only mis-selling, it is fraud. So why did banks argue against such clear violations of consumers’ rights? Only they can answer that but their actions have once again helped create the total mistrust many have in them.
Guy Anker is a personal finance journalist and TV producer
But the motive behind banks’ tactics is in desperate need of further scrutiny, with a charge list as long almost as long as the catalogue of methods they used to flog policies to unsuspecting borrowers. Not only did they mis-sell the insurance, most major banks (other than Santander) then put complaints on hold pending the result of the legal case.
This was in defiance of the FSA which clearly stated they must continue to process complaints on PPI – to protect loan and credit card payments if you cannot work. This has helped create such a huge back-log that most borrowers who demand compensation via the independent Financial Ombudsman Service must wait over a year.
The Ombudsman typically upholds over two thirds of PPI complaints in consumers’ favour, which highlights another abuse.
As you must first complain to your lender before involving the Ombudsman it shows far too many complaints are wrongly rejected initially.
The Ombudsman upholds over 90% of complaints against some of the worst offenders. Next up is examining why exactly banks launched the case. They claimed the FSA was wrongly asking them to apply new rules to judge the way they sold policies many years ago. Yet all the new rules do is add common-sense detail. When you consider much mis-selling happened when staff added insurance without consent or lied by telling borrowers that they’d only get a loan if they also bought cover, it does not matter what rulebook is in place – this is not only mis-selling, it is fraud. So why did banks argue against such clear violations of consumers’ rights? Only they can answer that but their actions have once again helped create the total mistrust many have in them.
Guy Anker is a personal finance journalist and TV producer
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