MSE News: Banks put PPI claims on hold in defiance of regulator

NIGELK_3

Also yesterday Lloyds said they would still honour all agreed settlements - is this still the case? What about the other banks - and agreed settlements?
FSA do something!

mrs_skint

NigelK - Eric is probably really busy right now - deciding what to spend his big fat pension on next year!

marshallka

NIGELK wrote: »

Also yesterday Lloyds said they would still honour all agreed settlements - is this still the case? What about the other banks - and agreed settlements?
FSA do something!

Di3004 has been told that her husbands claim (which was won) still stands.

Paul1234

So reading between the lines the banks are not happy with the new rules that come into effect in December. They are seeking a judicial review to determine the legality of the new rules the FSA want to implement. The new rules mainly impact changes to how PPI claims are handled prior to 2005 and the fact the banks have to intiate the work.

However, they are now taking the stance that any PPI claim arising before 2005 will be placed on hold and not processed. The FSA have stated that customer intiated complaints arising on products sold before or after 2005 should still be handled in the same manor as they were up until Friday.

So banks aren't happy about new rules but are applying it themselves retrospectively (isn't that the same argument they are using?). The banks are acting in definace of the FSA.

Here's one for you why don't the FSA just uphold all complaints for customers that are not processed within the 40 day deadline, or the banks put on hold based on their own interpretation. Would save the FSA an awful lot of manpower and send a clear message to the banks

marshallka

Paul1234 wrote: »

So reading between the lines the banks are not happy with the new rules that come into effect in December. They are seeking a judicial review to determine the legality of the new rules the FSA want to implement. The new rules mainly impact changes to how PPI claims are handled prior to 2005 and the fact the banks have to intiate the work.

However, they are now taking the stance that any PPI claim arising before 2005 will be placed on hold and not processed. The FSA have stated that customer intiated complaints arising on products sold before or after 2005 should still be handled in the same manor as they were up until Friday.

So banks aren't happy about new rules but are applying it themselves retrospectively (isn't that the same argument they are using?). The banks are acting in definace of the FSA.

Here's one for you why don't the FSA just uphold all complaints for customers that are not processed within the 40 day deadline, or the banks put on hold based on their own interpretation. Would save the FSA an awful lot of manpower and send a clear message to the banks

I don't think the FSA can uphold any complaint TBH. Its the job of FOS and there are still rules that FOS has to follow before they do uphold complaints.

Not sure about the 40 day deadline that you say above? Do you mean the 8 weeks that the business has to reply to complaints?

IF it is that the banks do not respond to complaints and then the consumer takes the complaints to FOS, FOS would still take about 12 to 18 months anyway to either uphold in favour of the consumer or uphold in favour of the bank. This would mean that most complaints would be dealt with after the Review anyway if the review was to take place early next year.

Also as of yesterday the FSA were given powers of "collective redress" (only of yesterday did it get granted!!) so maybe if the same thing keeps cropping up with the sales of PPI within the same firms, then the FSA may order that ALL PPI be redressed to people anyway - don't know but would be nice!!!

http://citywire.co.uk/wealth-manager/fsa-gains-collective-redress-powers/a439181
http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/155.shtml

http://www.fsa.gov.uk/pubs/guidance/guidance10.pdf
“The FSA will, however, seek to use this power where necessary to ensure consumers are fairly treated.”
The new power would be used in instances when there is evidence of widespread or regular failings that have caused consumer detriment. It is a rule making power, so the FSA must undertake cost-benefit analysis and consult each time it wants to establish a redress scheme.

marshallka

And this from 1st October about "complaints handling"

http://www.insurancedaily.co.uk/2010/10/01/fsa-acts-on-complaints-handling/

Paul1234

marshallka wrote: »

I don't think the FSA can uphold any complaint TBH. Its the job of FOS and there are still rules that FOS has to follow before they do uphold complaints.

Kinda my point in that rules exist the banks choose to ignore them when it suits them, so FOS should take similar steps.

marshallka wrote: »

Not sure about the 40 day deadline that you say above? Do you mean the 8 weeks that the business has to reply to complaints?.

Sorry, I see 8 weeks as 40 business days

marshallka wrote: »

IF it is that the banks do not respond to complaints and then the consumer takes the complaints to FOS, FOS would still take about 12 to 18 months anyway to either uphold in favour of the consumer or uphold in favour of the bank. This would mean that most complaints would be dealt with after the Review anyway if the review was to take place early next year.

So if the banks aren't following the rules and guidelines set out by the FSA then FOS should take some additional action. The banks have been told to continue processing claims which they are ignoring, so FOS should take the stand that doing nothing means the bank isn't challenging the complaint and should award in favour of the complaint.

I guess the banks are trying to do the same thing here as with charges. Put all complaints on hold and stop using existing rules with the hope that their laywers can work some magic and avoid paying out. The banks can spend millions on legal fees whereas the FOS/FSA can't, even legal costs of £1bn are still atractive in avoiding a £2.7bn payout.

marshallka wrote: »

Also as of yesterday the FSA were given powers of "collective redress" (only of yesterday did it get granted!!) so maybe if the same thing keeps cropping up with the sales of PPI within the same firms, then the FSA may order that ALL PPI be redressed to people anyway - don't know but would be nice!!!.

I wonder if Lloyds put PPI cases on hold the day before the FSA got "collective redress" on purpose? Timing seems very convenient.

Of course the consumer does have one card left to play. Collectively close accounts with the UK banks and open with Santander.

marshallka

Paul1234 wrote: »

Of course the consumer does have one card left to play. Collectively close accounts with the UK banks and open with Santander.

There is a Santander appreciation thread (sort of!!) going now!!! (debt55 started one!!)

Paul1234

Maybe we should create a Twitter channel #OfftoSantander or #UKBanksLastStraw

debt55

martin lewis needs to make some noise about santander

start the campaign, lets jump ship to the spanish bank and prove the british elite cannot extract the urine any longer... (fat chance and we all know it)