PPI news thread

di3004

http://www.thisismoney.co.uk/credit-and-loans/ppi-mis-selling/article.html?in_article_id=493866&in_page_id=506

Barclays refuses to accept PPI mis-selling

Richard Dyson, Financial Mail
15 November 2009, 9:27am
Reader comments (2) | Guide | Deals

Cancer victim Roy Barker was charged £22,000 for PPI cover he could never claim - but the bank behind this notorious and useless insurance has offered no apology and says: 'It wasn't compulsory'.


More astonishing examples of banks tricking desperate borrowers into spending £10,000 or more on worthless insurance are emerging in their thousands - despite efforts by the Financial Services Authority to force lenders to review past sales and improve their investigation of complaints.

The payment protection insurance (PPI) was usually sold alongside loans and was supposed to pay out if borrowers lost their income through sickness or redundancy.

But many policies were foisted on those who would never be eligible to claim. Most PPI plans were cynically designed to offer limited cover, even if policyholders managed to claim (see report, below).

›› Test: Find out if you are entitled to claim back PPI

The PPI scandal has gone on for almost a decade. Financial Mail first warned borrowers to shun all PPI from Lloyds TSB in 2001.
In recent years the FSA has toughened its stance, fining some firms and limiting the way plans can be sold.

But cases still surface. Financial experts say this is partly because of rising home repossessions brought by lenders where the cost of PPI emerges as contributing to the borrower's problems.
The Financial Ombudsman Service, which investigates disputes brought by consumers against banks and other financial firms, said PPI complaints jumped threefold to 31,000 in the year to April.

Last week it said PPI complaints were higher still for this year, pouring in at a rate of 750 a week and on track to reach 40,000 by next April.
The FOS continues to uphold nine out of ten PPI complaints and few cases are as terrible as that of Roy Barker, 56, whose financial difficulties began after he was diagnosed with cancer in 2004.

His debts mounted as he took eight months off work for treatment.
By late 2006 he was back at work as an NHS project manager near his home in Maidstone,
Kent, and it seemed sensible to wrap all his debts into a single £91,000 loan secured against his house. This was on top of an existing mortgage.
The loan was sold over the phone by an agent working for Firstplus, a subsidiary of Barclays. Firstplus encouraged homeowners to borrow up to 125% of their property's value and TV personality Carol Vorderman was the public face of the company for years.

The loan rates certainly looked attractive, but that was partly because Firstplus also profited from PPI policies whose premiums cost up to 25% of the loan. In Roy's case, PPI cost an incredible £22,286.
But he did not know that. 'I was advised that taking PPI cover would be a good idea,' he says. 'Nothing was said about cost.'
Nor was anything said about the fact that he would never be able to claim because his cancer disqualified him from cover.

Nor was it explained that the £22,286 would be added to his loan, vastly increasing the interest he would pay.
And nor was it explained that mis-selling the useless PPI triggered commission of up to £16,000, to be shared between Firstplus and the agent, a company called Central Capital based in Watford, Hertfordshire.
Roy remains in work but due to his partner's recent redundancy the couple fell behind on the loan repayments and earlier this year Firstplus moved to repossess their home.
Thanks to Cartel Client Review, one of a number of aggressive, and successful, firms that represent consumers against financial services companies, Roy has managed to overturn the repossession and remains in his home.

More on above link.

shooby1

http://www.fsa.gov.uk/pages/Library/Communication/Statements/2009/cp0923_update.shtml

looks like the discussions with banks couldtake a while longer

di3004

Thanks for this Shooby1.;)

di3004

This here is actually news from October........

http://www.guardian.co.uk/business/2009/oct/25/bank-executives-fines-insurance-policies

Bank bosses should be held to account for PPI mis-selling, says consumer body

Financial Services Consumer Panel chairman calls on the FSA to impose personal fines on senior executives

• The Observer, Sunday 25 October 2009

Bank bosses should face personal fines if their companies are found to have mis-sold insurance policies, according to the head of one of the UK's leading consumer-advocate bodies.
Adam Phillips, chairman of the Financial Services Consumer Panel (FSCP), said he wanted the most senior executives to be held to account by the Financial Services Authority.
He told the Observer: "I want to see more senior people, the heads of UK retail banking, sanctioned for mis-selling payment protection insurance [PPI]. At the moment the most senior person [to have been sanctioned] is the chief executive of Land of Leather."
If his view prevails, then the chief executives of the retail divisions of major banks such as Lloyds Banking Group, Barclays and Royal Bank of Scotland could face fines if their companies are found to have mis-sold plans.
PPI is designed to cover loan repayments if a borrower falls ill or loses their job. Sales of the policies are believed to earn lenders around £4bn a year.
The Competition Commission had planned to ban the sale of such policies at the same time as a personal loan or credit card is taken out, making companies wait seven days before contacting customers to see if they wanted cover. The move, intended to make it easier for customers to shop around, was put on hold after it was challenged by Barclays.
Paul Briant, chief executive of Land of Leather, was fined £14,000 for failing to properly oversee the sale of PPI by his firm. The FSA found that the company had not ensured that all its sales force was fully trained to sell PPI over a six-month period in 2006 and that it had failed to make any effective check on its sales force until February 2007, exposing 58,000 customers to the risk of buying unsuitable plans. Land of Leather was also fined £210,000.
But when Alliance & Leicester was fined £7m for mis-selling PPI over the phone, none of the bank's senior staff was penalised.
The Financial Ombudsman Service, which handles consumer complaints about numerous regulated products, has received fewer than 30 complaints of mis-selling from Land of Leather customers in the first six months of this year. In contrast, it has upheld nearly 3,500 complaints of PPI mis-selling against Lloyds during the same period, and another 2,000 against its subsidiaries Bank of Scotland and Black Horse Ltd, yet no individuals have been held responsible at these companies.
Other financial services companies that have had a high number of PPI mis-selling complaints upheld include Barclays, MBNA, the Royal Bank of Scotland and Welcome Financial Services.
Phillips said: "Banks are supposed to have systems to make sure they don't have these failures. It's clearly the case that there was a massive systems failure. Someone is responsible for making sure that doesn't happen."
A spokeswoman for the banking regulator, the Financial Services Authority, said it had taken the action it thought appropriate against firms where mis-selling had taken place. She said: "We've got complete commitment to taking action against individuals where there's the evidence for us to take action."
Phillips, who joined the FSCP in 2004 and took over as chairman in July, believes the next big mis-selling problems are likely to involve self-invested personal pensions and equity release products, which allow older people to realise cash from the value of their home.

di3004

financial ombudsman gears up for record 200,000 complaints – and freezes levy and case fee


12 January 2010

consultation opens on ombudsman's corporate plan and budget for 2010/11


The Financial Ombudsman Service today publishes for public consultation its proposed budget for next financial year (2010/11) – together with an update on the numbers and workload for the current financial year (2009/10).
The budget sets out how the ombudsman service plans to gear up to resolve a forecast 27% increase in the number of disputes in the 2010/11 financial year.
This will involve the ombudsman settling a record 210,000 complaints from consumers unhappy with their treatment by financial firms. This compares with the 165,000 consumer complaints that the ombudsman expects to resolve in the current financial year – itself a 44% increase on the previous year.
The further substantial increase in the volume of new cases expected to be referred to the ombudsman in 2010/11 – rising to 190,000 – takes account of initial forecasts from the financial services industry and largely reflects the continued impact of the recession.
Meanwhile, the total number of new cases brought by consumers to the ombudsman in the current financial year (2009/10) looks likely to exceed by 11% the figure of 150,000 in the budget. This reflects continued higher levels of complaints about payment-protection insurance (PPI) than originally anticipated (42,700 PPI complaints now forecast for 2009/10, compared with a figure of 25,000 in the budget).
The number of PPI complaints referred to the ombudsman service is expected to continue to rise to 46,000 cases in 2010/11. Other areas where growth in complaint numbers is expected in 2010/11 are banking (forecast to increase by 16% to 85,000 cases) and consumer credit (forecast to increase by 55% to 10,200 cases).
This continued growth in the ombudsman's workload will involve an increase in operating costs from £96.6m (forecast for 2009/10) to £113.5m (in 2010/11). This includes the cost of 300 additional casework staff needed to help resolve the expected 210,000 complaints.
The ombudsman service's unit cost – its average cost of handling a case, taking all overheads into account – is forecast at £587 for the current year (2009/10) and is expected to fall by 8% to £540 in 2010/11.
This means that the total levy to be paid by the financial services industry in 2010/11 – raising 20% of the ombudsman service's funding – can be frozen at the amount levied in 2009/10. And the case fee – paid by those financial firms that have four or more disputes referred to the ombudsman service during the year, and meeting the other 80% of the ombudsman service's funding requirement – will also be held down at the previous year's rate of £500.

di3004

http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/018.shtml

FSA/PN/018/2010
29 January 2010
The Financial Services Authority (FSA) has today confirmed that it will require firms to publish information on how they handle complaints, to help people see how firms are performing in this important area and to drive up complaints handling standards across the industry.
Firms that receive 500 or more complaints in a six month period will have to publish the following information twice a year:

• How many complaints they have opened and closed;
• The percentage closed within eight weeks; and
• The percentage of complaints upheld.

Firms will need to present this information by five product areas: banking, home finance, general insurance and pure protection, life and pensions, and investments.
The FSA will then use this information to publish a consolidated list of complaints data covering all affected firms twice a year.
Sheila Nicoll, the FSA’s director of conduct policy, said:
"We are committed to greater transparency where this will help consumers. For the first time, people will be able to see how many complaints particular firms receive and how they handle them. We believe that this will help improve how firms treat their customers and provide incentives for firms to deal more effectively with complaints when they are received. Our more intensive approach to supervision places a greater focus on assessing how firms deal with their customers – and how firms handle complaints is a key part of this.”
All affected firms will have published their first figures by 31 August 2010. The FSA will then publish its first set of consolidated data in September 2010.

di3004

More here ...........

FSA confirms complaints handling plans:

The FSA has confirmed that it will require firms to publish information on how they handle complaints, to help people see how firms are performing in this important area and to drive up complaints handling standards across the industry.

Its Policy Statement (PS10/1): ‘Publication of Complaints Data, including feedback to CP09/21’, which outlines its stance, is available on the FSA website.

Firms that receive 500 or more complaints in a six month period will have to publish the following information twice a year how many complaints they have opened and closed; the percentage closed within eight weeks; and the percentage of complaints upheld.

Firms will need to present this information by five product areas: banking, home finance, general insurance and pure protection, life and pensions, and investments. The FSA will then use this information to publish a consolidated list of complaints data covering all affected firms twice a year.

Sheila Nicoll, the FSA’s director of conduct policy, said: "We are committed to greater transparency where this will help consumers. For the first time, people will be able to see how many complaints particular firms receive and how they handle them. We believe that this will help improve how firms treat their customers and provide incentives for firms to deal more effectively with complaints when they are received. Our more intensive approach to supervision places a greater focus on assessing how firms deal with their customers – and how firms handle complaints is a key part of this.”

All affected firms will have published their first figures by 31 August 2010. The FSA will then publish its first set of consolidated data in September 2010.

http://www.bestadvice.net/story.php?id=17525

di3004

Essential reading for people interested in financial complaints – and how to prevent or settle them.


http://www.financial-ombudsman.org.uk/publications/ombudsman-news/83/83.pdf

di3004

Warning! fraudulent phone calls claiming to be from the ombudsman service

http://www.financial-ombudsman.org.uk/news/updates/fraudulent-phonecalls.htm

Phone calls are being made by a firm claiming to be the Banking Ombudsman or Insurance Ombudsman and asking consumers to pay an upfront fee and reveal their bank account details or passwords.
These calls are not genuine. The Financial Ombudsman Service is a free service for consumers and there is no need for consumers to make any payment to us. The ombudsman service does not "cold call" consumers and ask for their banking details.
If you get a phone call that seems a bit suspicious from someone who claims to be from the ombudsman service – or who says the ombudsman service has passed on your contact details – you can check it out by calling us on 0300 123 9 123.
To help protect yourself generally from fraudulent telephone calls or emails – you should:

• never provide personal details – such as your address, date of birth etc unless you’re absolutely certain the request is genuine
• never provide any of your banking or credit card details unless you’re absolutely certain the request is genuine; and
• never give anyone your security information, such as your internet/telephone banking password or logon details. No genuine banking firm ever asks you to provide this information.

More information on how to protect yourself from scams.

di3004

How banks' insurance policies are a rip-off:


http://www.thisismoney.co.uk/insurance/article.html?in_article_id=500190&in_page_id=4


Britain's state-backed banks are targeting loyal customers by overcharging them for insurance. Home insurance costs depend on where you live. Are you paying more than the neighbours? >Check your postcode



Not content with ripping them off on current accounts and credit cards, the banks are now boosting their coffers with overpriced cover.

A Money Mail investigation has discovered that RBS/Natwest and Lloyds Banking Group are selling home, car and travel policies that cost hundreds of pounds more than comparable policies from other High Street banks or online providers.
In some cases a family of four would pay £1,330 more by going with Halifax, part of Lloyds Banking Group; a retired couple would be £364 worse off by choosing RBS/Natwest over Beatthatquote.com, and a young couple who were customers of either of these banks would fork out up to £493 more than if they went to a comparison site.
The shocking findings show how poorly these banks - which have taken billions of pounds of our money - are serving the customers who helped bail them out.
Banks make huge amounts of money from selling insurance. They don't make a great deal of money from most ordinary current account customers. So instead they look to boost their takings by flogging packaged accounts with monthly fees, credit cards, loans and insurance.
Our investigation looked at the prices charged for home, car and travel insurance by the main High Street banks, Nationwide BS, online comparison site Beatthatquote.com and independent insurance brokers.
We had three scenarios - a retired couple in their 60s who live in a bungalow in Colchester, Essex wanting home, car and travel insurance; a young couple in their 20s with a flat in Nottingham needing home, car, travel and life cover, and a family of four living in a three-bed semi-detached house in Bristol wanting home, cover for two cars, travel and life cover.
Time and again the state-backed banks came out worst.
James Daley, money editor at Which?, says: 'It comes as no surprise that the banks' insurance products are expensive. Part of the reason they fight so hard for your current account business is so they can cross sell.
'They often have a good first-year rate, then ratchet them up in year two, knowing most people don't shop around.'
The young couple would be charged £927 by Royal Bank of Scotland (RBS) or NatWest, £869 by LloydsTSB and £793 by HSBC. But if they logged on to comparison site Beatthatquote.com they would only have to pay £434, or if they visited an insurance broker, £529. The retired couple would pay £790 if they took cover through either RBS or NatWest and £607 through LloydsTSB. But online they would only pay £426.