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

marshallka

TheBigDog wrote: »

What won't happen is that any Court will stop PPI complaints, because we're too far down the road for that to happen, so this isn't going to pan out like the Bank Charges on a narrow point of law. Looking ahead, it's how the complaint is worded is going to paramount, because you won't then be able to bring ICOB arguments into a GISC regulated sale.

Hope this helps,

TBD.

Just so people know what the GISC code of conduct was some of it is here

General Insurance Standards Council (GISC) (from 2001)

The General Insurance Standards Council (GISC) promised in its Code that its members would:

- act fairly and reasonably when we deal with you [the customer];

- make sure that all our general insurance services satisfy the requirements of this Private Customer Code;

- make sure all the information we give you is clear, fair and not misleading;

- avoid conflicts of interest or, if we cannot avoid this, explain the position fully to you;

- give you enough information and help so you can make an informed decision before you make a final commitment to buy your insurance policy.

The GISC Code provisions included:
[3]
We will give you enough information and help so you can make an informed decision before you make a final commitment to buy your insurance policy.

[3.2]


We will make sure, as far as possible, that the products and services we offer you will match your requirements ...

• If it is practical, we will identify your needs by getting relevant information from you.
• We will offer you products and services to meet your needs, and match any requirements you have.
• If we cannot match your requirements, we will explain the differences in the product or service that we can offer you.
• If it is not practical to match all your requirements, we will give you enough information so you can make an informed decision about your insurance.

[3.3]


We will explain all the main features of the products and services that we offer, including ...

• any significant or unusual restrictions or exclusions;
• any significant conditions or obligations which you must meet.

[3.4]
We will give you full details of the costs of your insurance.

[3.5]


If we give you any advice or recommendations, we will:

• only discuss or advise on matters that we have knowledge of;
• make sure that any advice we give you or recommendations we make are aimed at meeting your interests; and
• not make any misleading claims for the products or services we offer or make any unfair criticisms about products and services that are offered by anyone else.

http://www.financial-ombudsman.org.uk/publications/technical_notes/ppi/rules-codes.html

sunandsailcat

ankerbankers wrote: »

Nothing on hold anymore at Lloyds, correct, however no timescales given!! mmmmmmmmmmmm!!!::mad::mad:

Just to let you know was told this morning that my Acceptance slip was being reprinted and would be sent out in next week or so. Rang them back this afternoon given their history of giving incorrect information and surprise.....no acceptance letters are now being sent out not even the reprints and they won't send them out until the judicial review is complete.

Back to FOS after the 8 weeks I'm afraid:mad:

CHF

marshallka wrote: »

Just so people know what the GISC code of conduct was some of it is here

General Insurance Standards Council (GISC) (from 2001)

The General Insurance Standards Council (GISC) promised in its Code that its members would:

- act fairly and reasonably when we deal with you [the customer];

- make sure that all our general insurance services satisfy the requirements of this Private Customer Code;

- make sure all the information we give you is clear, fair and not misleading;

- avoid conflicts of interest or, if we cannot avoid this, explain the position fully to you;

- give you enough information and help so you can make an informed decision before you make a final commitment to buy your insurance policy.

The GISC Code provisions included:
[3]
We will give you enough information and help so you can make an informed decision before you make a final commitment to buy your insurance policy.

[3.2]








We will make sure, as far as possible, that the products and services we offer you will match your requirements ...

• If it is practical, we will identify your needs by getting relevant information from you.
• We will offer you products and services to meet your needs, and match any requirements you have.
• If we cannot match your requirements, we will explain the differences in the product or service that we can offer you.
• If it is not practical to match all your requirements, we will give you enough information so you can make an informed decision about your insurance.

[3.3]








We will explain all the main features of the products and services that we offer, including ...

• any significant or unusual restrictions or exclusions;
• any significant conditions or obligations which you must meet.

[3.4]
We will give you full details of the costs of your insurance.

[3.5]








If we give you any advice or recommendations, we will:

• only discuss or advise on matters that we have knowledge of;
• make sure that any advice we give you or recommendations we make are aimed at meeting your interests; and
• not make any misleading claims for the products or services we offer or make any unfair criticisms about products and services that are offered by anyone else.

True, but I think you will find that a lot of the pre 2005 GISC sales were non advised and therefore subject to less stringent rules

TheBigDog

CHF wrote: »

Hi BigDog, seeing as you stuck your head above the parapet first, I too will admit to working in claims management. I agree with a lot of the points you made but would perhaps like to take up a few points for discussion as like you say, a lot of this is just speculation and best guessing from us guys.

HI CHF,

Thanks for your feedback - it looks as though we are in agreement on a number of points.

On the comment you raised regarding GISC, the point I was trying to make is that the firms selling insurance when GISC was in force, would not have known about ICOB rules being implemented in the future. For example, if an adviser was sitting in Nat West at the end of 2003, there is no way he or she would have known about the ICOB rules that would come into force in January, 2005 and would therefore have sold the policy in accordance with GISC rules (allegedly!). However, the FSA have directed firms to check their sales in accordance to ICOB rules, but this is where the battlegrounds have been drawn up. The BBA state that this is unfair as ICOB didn't come into force until 2005 and it would be unfair for firms to use a set of rules to judge whether a product was mis-sold or not when the particular set of rules weren't in existence at the time the product was sold.
To put it another way, lets say you bought a house in 2003 for arguments sake. In 2007 a bail hostel was built next door and your property lost half of its value because of it. You cannot then go back and say to the vendor and say that you want your money back because the hostels now arrived, because the vendor will say - hang on - the hostel wasn't there in 2003, so thats not fair of you to ask me to give you your money back based on something that didn't exist.
I think the BBA are going to use a very similar argument in the High Court when we see the Court Documents.

Regards,

TBD.

TheBigDog

marshallka wrote: »

Martin DID mention on Daybreak and Guy was the first to do a news story when Lloyds were holding back complaints I think.

I think everyone is waiting for the 21 days to be up whereby the FSA are "supposed" to fire back.... not happening though yet but that is not to say it won't.

Hi Marshalka,

I'm not trying to critical of Martin, however, I dont believe that he has made as much noise as he could have done here. I've got a lot of time for him (and his 2 for 1 vouchers come in handy for days out!), but for someone who has been championing the ppi debate, I think he could raise a lot more awareness than he has done. Maybe this might change once we see the Court Documents.

In the meantime, I don't think that we're going to see any fireworks from either the FSA or the FOS on the Judicial Review for a while. I'll be very suprised if they make a move next week. Unfortunately, they're both corporate dinosaurs and they'll take a while before they act on anything.

Regards,

TBD.

marshallka

sunandsailcat wrote: »

Just to let you know was told this morning that my Acceptance slip was being reprinted and would be sent out in next week or so. Rang them back this afternoon given their history of giving incorrect information and surprise.....no acceptance letters are now being sent out not even the reprints and they won't send them out until the judicial review is complete.

Back to FOS after the 8 weeks I'm afraid:mad:

And lets hope that FOS can kick !!! then!!

NIGELK_3

The FSA have sent me an email today re PPI complaints on hold...

"
In response to your claim I would say that regulated firms, including banks, cannot refuse to process complaints. The FSA expects firms to continue handling PPI-related complaints in line with its rules. That said, one of these rules does enable firms, in appropriate cases, to send a holding reply. DISP 1.6.2R states:
"The respondent must, by the end of eight weeks after its receipt of the complaint, send the complainant:
(1) a final response; or
(2) a written response which:
(a) explains why it is not in a position to make a final response and indicates when it expects to be able to provide one;
(b) informs the complainant that he may now refer the complaint to the Financial Ombudsman Service; and
(c) encloses a copy of the Financial Ombudsman Service (FOS) standard explanatory leaflet."
You should receive a response from the firm within 8 weeks, after which you can escalate your complaint to the Ombudsman if you are dissatisfied with the response."
ALSO
"
If any consumer feels that their complaint has not been handled fairly, then they should refer their complaint to the Ombudsman. I accept that in some cases, firms will have a reasonable basis for sending a holding reply pending the outcome of the judicial review. It is important to note, however, that this will depend on a consideration of the individual circumstances of the PPI complaint. The FSA does not agree that it is appropriate to put all PPI complaints on hold. In any case, on hold means not assessing or investigating the complaint, rather than rejecting it. Consumers can and should go to the FOS if they are not satisfied."
Still it seems to me like the FSA are hedging their bets?

TheBigDog

I accept that in some cases, firms will have a reasonable basis for sending a holding reply pending the outcome of the judicial review. It is important to note, however, that this will depend on a consideration of the individual circumstances of the PPI complaint. The FSA does not agree that it is appropriate to put all PPI complaints on hold.


I think that speak volumes - they're talking about pre-2005 sales.

We've had a call from the FSA this morning, and we've also had a letter from the BBA. Now it's getting interesting.


The FSA have stated that their position remains unchanged at present, however, they've also admitted that they haven't responsed to the BBA either, so that could change in the next week or so.


The BBA letter is pretty heavy - I dont know how to upload a pdf on here (if anybody does know, please let me know and I'll put it up for people to read). They've stated that they have requested that Policy Guidance PS10/12 is withdrawn.They go on to say that during the JR, member firms will continue to handle complaints in line with their internal procedures and complaints that aren't affected will be dealt with normally and for complaints that are directly affected by the JR, the member will write to the consumer stating the complaint cannot be resolved until the JR has been completed. (As a side issue - they've been very careful not to mention 'oh-hold' anywhere in their letter).


Where does this leave us? Well, I'm 99% sure now that the cases affected will be pre ICOB and I'm reasonably sure that the FSA will allow firms to, in effect, put the case on hold until after the Judicial Review. However, the FSA will continue to hear cases, and based on the email from Nigel, the FOS will adjudicate on an individual basis - so it's going to be how the complaint is bought to the FOS in the first place, as in - clear and not mis-leading information under GISC regulations.


Where it gets curiouser and curiouser is how firms used to sell PPI pre ICOB. Yes, the rules were a lot less stringent then, however, the firms's paperwork was a lot less informative as well.


It's also going to be interesting to see how lenders change their internal controls. Let's take the Halifax for example.

(You probably haven't read this anywhere else on this site either!)

The Halifax claims manual says the following:

If the sale was prior to 1st of November, 2006, the policy was lump sum and the client doesn't allege fraud - the case is automatically upheld (when Halifax's lawyers read this on here - they're going to have a heart attack!).

Now, if the Halifax change this rule and put the cases on hold - it opens up a massive can of worms for them. There's 2 fundamental flaws in Halifax CCA's dating back to this time - firstly, it doesn't mention the word optional on the credit agreement and secondly, it doesn't break down the cost of the PPI policy in monthly terms. They could have a big problem here with GISC regulation.

Any mention of the cost wasn't explained to me properly will automatically allow the FOS to investigate the sale on GISC regulation, and probably uphold as well - if you couple this with the adviser in the Halifax stating you had to have the policy in order to get the loan, then they've definately fallen foul of GISC Regs and the Halifax have got a big problem.

I don't think that any lender at the moment has got a clue how to handle this and everybody is waiting for the Legal Teams to give their take. After saying that, once we know exactly what the Court Docs say, then I think lenders will get back to work on the complaints - and they'll move quickly. I think that they've got to because otherwise, the FOS is going to get a huge spike in the number of complaints they're getting in through the door and then it's going to be blatantly obvious to them that firms aren't giving Final Responses as instructed. Firms won't want this to happen, because it could lead to massive fines for not treating customers fairly.

Interesting times ahead!

TBD.

hopefulshell07

I still havent heard from the so called bank - they had my acceptance in August but have not heard a single thing from them except when I rang them to be told they are not paying out on anything as its all on hold! So I will have to ring them again tomorrow as this is well over the 28 days. Does anyone have the best telephone number to get through to someone who knows what is going on?
Many thanks

debt55

hopefulshell07 wrote: »

I still havent heard from the so called bank - they had my acceptance in August but have not heard a single thing from them except when I rang them to be told they are not paying out on anything as its all on hold! So I will have to ring them again tomorrow as this is well over the 28 days. Does anyone have the best telephone number to get through to someone who knows what is going on?
Many thanks

holds do not effect any complaint already upheld, as you got the form to sign and accept the offer months ago, they are taking the proverbial.

phone them and demand to speak to a supervisor.

you deserve your payout!