MSE News: Banks bid to block PPI compensation

Alpine_Star

dunstonh wrote: »

It makes sense. With estimates between one third and one half of PPI complaints being fraudulent or try-it-on, its no surprise that they want action taken.

I don't believe that for a heartbeat.

How can half of PPI claims be fraudulent or try-it-on when banks uphold over half of PPI complaints - not to mention the 90% uphold rate of the FOS?

dunstonh

How can half of PPI claims be fraudulent or try-it-on when banks uphold over half of PPI complaints - not to mention the 90% uphold rate of the FOS?

Some types of PPI have almost 100% upheld rates. Other types have very low upheld rates.

You just need to ask any complaints handler at a company and they will tell you what they get. Yes banks are the worst at mis-sales. They have been for a very long time. However, a lot of people are being paid out redress when they shouldnt be (if it had been done correctly) as the banks lacked the audit trail (their own fault you could easily argue) and there is political pressure on them at the moment. That lack of audit trail encourages the claims companies to try-it-on as many will get lucky.

This mirrors past widespread areas. Going back 20 years, the person that set up the pensions review admitted that quite a lot of people got paid redress when they shouldnt have been. The endowment situation was similar with poor record keeping (based on 1970s/80s style thinking) led to them not being able to provide the evidence. On a typical 1000 complaints for endowments around 20 were genuine mis-sales. However, another 220 would typically result in payout because of missing records or poor documentation (i.e. not upheld but not good enough to reject so had to pay out).

It was that level of poor/missing documentation that led to claims companies seeing it as an easy way to make money. Whilst financial companies tightened up on paperwork on regulated financial products, general insurance didnt get the same sort of treatment and its partly a moving of the goal posts by the FSA that is seeing some of the decisions and rulings based on retrospective rule changes rather than the rules that were in place at the time.

~Brock~

Careful dunstonh, you'll end up with the torch bearing mob knocking your door down with talk like that.....:money:

Alpine_Star

dunstonh wrote: »

Some types of PPI have almost 100% upheld rates. Other types have very low upheld rates.

You just need to ask any complaints handler at a company and they will tell you what they get. Yes banks are the worst at mis-sales. They have been for a very long time. However, a lot of people are being paid out redress when they shouldnt be (if it had been done correctly) as the banks lacked the audit trail (their own fault you could easily argue) and there is political pressure on them at the moment. That lack of audit trail encourages the claims companies to try-it-on as many will get lucky.

This mirrors past widespread areas. Going back 20 years, the person that set up the pensions review admitted that quite a lot of people got paid redress when they shouldnt have been. The endowment situation was similar with poor record keeping (based on 1970s/80s style thinking) led to them not being able to provide the evidence. On a typical 1000 complaints for endowments around 20 were genuine mis-sales. However, another 220 would typically result in payout because of missing records or poor documentation (i.e. not upheld but not good enough to reject so had to pay out).

It was that level of poor/missing documentation that led to claims companies seeing it as an easy way to make money. Whilst financial companies tightened up on paperwork on regulated financial products, general insurance didnt get the same sort of treatment and its partly a moving of the goal posts by the FSA that is seeing some of the decisions and rulings based on retrospective rule changes rather than the rules that were in place at the time.

So in summary it's all the fault of CMC's and banks themselves. I'm struggling to see where the ''fraudulent'' complainant is to blame.

jamesd

Alpine Star, that's an odd view of blame. Dunstonh was describing cases that weren't mis-sales but where the records needed to prove it weren't available. Lack of sufficient records to definitively prove that it wasn't a mis-sale doesn't make it a mis-sale and it's still wrong for the customer to falsely claim that there was a mis-sale in the hope that there won't be records to prove that it wasn't a mis-sale.

This is very different from the genuine mis-sale cases, where the customer is fully entitled to get their money back with no ethical consideration at all - the sale to these people shouldn't have happened.

Alpine_Star

jamesd wrote: »

Alpine Star, that's an odd view of blame. Dunstonh was describing cases that weren't mis-sales but where the records needed to prove it weren't available. Lack of sufficient records to definitively prove that it wasn't a mis-sale doesn't make it a mis-sale

It is is an odd view and not one I share.

The lack of sufficient records is not proof of fraud.

There is no data to substantiate that one third to half of all PPI claims are fraudulent. To date there have been 24 separate enquiries into PPI by FSA, OFT and the Competition Commission - all highly critical - and not one of them suggesting that claimant fraud is a significant factor in the volume of complaints.

By all means let's debate this but at least base our views on facts.

dunstonh

So in summary it's all the fault of CMC's and banks themselves. I'm struggling to see where the ''fraudulent'' complainant is to blame.

Way to go with selective reading.

The lack of sufficient records is not proof of fraud.

No. But you have people saying they are self employed when they are not. Or that they had sufficient funds to self insure, when they didnt. Or claiming other policies existed when they dont.

There is no data to substantiate that one third to half of all PPI claims are fraudulent.

Because each firm has its own internal figures and no official body records it. However, the FOS have admitted that a figure of around 1/3rd is likely.

To date there have been 24 separate enquiries into PPI by FSA, OFT and the Competition Commission - all highly critical - and not one of them suggesting that claimant fraud is a significant factor in the volume of complaints.

The Hunt report highlighted some issues. The Conservatives acknowledged (pre coalition) that the system is open to abuse in its current form.

By all means let's debate this but at least base our views on facts.

How many complaints do you deal with? None. I suggest you just ask any complaints handler for a company and they will give you an idea of the volume. However, even if you go by the forums alone, its pretty clear that many people are just trying it on and don't actually have a genuine mis-sale.

marshallka

Almost half of all PPI complaints are dismissed by the firm. Of that half 30% take the complaints to the FOS and of that 30%, 80% are upheld.

Example

1000 complaints submitted
500 dismissed 500 upheld directly by the firm
150 complaints then go to FOS (30% go to FOS)
FOS upholds 120 of them (80%)

So out of 1000 complaints submitted in total 620 are upheld eventually!!! 380 complaints not upheld? (38%)

Common_Sense_2

Alpine_Star wrote: »

There is no data to substantiate that one third to half of all PPI claims are fraudulent.

I am a complaints manager for a company - 35% of all PPI complaints i get, don't actually have PPI

I would class "complaining about something you don't actually have" as a fraudulent claim - wouldn't you?

ps - not all single sum PPI are upheld by the FOS.

Alpine_Star

dunstonh wrote: »

How many complaints do you deal with? None. I suggest you just ask any complaints handler for a company and they will give you an idea of the volume.

Why would I value the opinion of discredited PPI complaints handlers from a discredited industry? If they get 90% of disputed PPI complaints decisions overturned by the FOS, they are hardly a credible source of unbiased information.