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MSE News: Lloyds 'wrongly rejecting PPI claims'

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  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    JuicyJesus wrote: »

    Claiming that something happened when it did not in order to obtain money from a bank that you are not entitled to is fraud.

    It's only fraud if a judge says it is - and in respect of PPI complaints, not one has.

    I really don't think bogus complaints are capable of being fraudulent. Ultimately a bank has complete and utter discretion in deciding whether to award compensation for alleged mis-selling and it is a decision entirely for the bank to make.

    A bank cannot both actively do something knowingly & willingly, in full ppossession of the facts, AND be deceived into doing so at the same time.
  • Jacqual
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    worried48 wrote: »
    Why January - is something changing in January?

    Sorry for the late reply. I mentioned January because I believe the plan was or is for the temps to leave then. I'm not sure that will be the case now.
  • MoMoney123
    MoMoney123 Posts: 7 Forumite
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    edited 9 November 2012 at 12:57AM
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    I recently had a claim rejected by LTSB when it clearly stated on my account that when the PPI was taken out I was a student and only working part time less then 16 hours. I have since passed on all the details to the Financial Ombudsman. After discussion with Ombudsman they advised they have over turned the banks decision in similar cases. Even after discussing and sending the letter sent to me by LTSB regarding my status, they still insisted that it had not been misold . They could not provide me with any information as to how they came to the decision or provide any of the documentation I was assessed against.

    The worst part of the experience is that service you get is totally crap. The people you speak to are not even grads. They are advisors in call centre half way around the world and havent got a clue and cant even read the notes correctly listed on the complaints.

    On a positive note today had my complaint with Barclaycard upheld again PPI was sold to me while I was a student. The experience to get the final decision was much better with staff who understand you and you can understand them. Only issue is I think the payment is to low based on my PPI payments for the last year on a credit card which I have had since 2004.
  • RagTrade
    RagTrade Posts: 17 Forumite
    edited 9 November 2012 at 3:33AM
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    Just one thought which I wonder if someone with greater knowledge than me could possibly answer - if you are a current, otherwise good customer, is a bank more likely to uphold your claim?

    Of course I am speaking totally "unscientifically" and I only mention it as this is what I was effectively told by an advisor at my local Lloyds branch who positively encouraged me to put a claim in and I also get hints from some previous posts on here. All my lending has been with Lloyds and I have a healthy salary paid into my account every month.

    I duly put in a claim for five loans dating back to the early 00s and for a credit card which I have held over the same period. There is no doubt they all have PPI on them and my main reason as to their invalidity is that I am a lifelong sufferer of psoriatic arthritis (think the Singing Detective...not pleasant!) and on the two largest loans (17k and 20k, both taken in branch) I was told the PPI was compulsory.

    Lloyds quickly acknowledged my claim and I have since had two interviews over the phone around 3 weeks after starting my claim.

    Any thoughts would be much appreciated!
  • magpiecottage
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    It's only fraud if a judge says it is - and in respect of PPI complaints, not one has.

    By that logic, Jimmy SO VILE never committed any offence because no judge ever said he did and, because he is now dead, never will.

    It IS an offence, even if the offender has got away with it.

    Oh - and both fraudsters and child molesters are tried by juries, not judges.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
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    edited 9 November 2012 at 10:15AM
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    Our Uphold rate for the Lloyds banking group in general prior to July 2012 from January 2012 was 78%.

    That is because they were conceding compliance. Back in the days of the pension review the same thing happened because there were so many cases to look at within an agreed timescale that they had no option.
    Our Uphold rate since August 2012 against Lloyds is 38%
    That is because they have now started looking at complaints in more detail. That is their right. After all, if somebody sent you an invoice you were not expecting you would not want to pay it if you were not sure you had to.

    [qoute]against Halifax/Bos is 8%.[/quote]I would expect Halifax to be lower because a far higher proportion of its business is mortgage related. Mortgage PPI is seldom added to the loan, removing the most common reason for upholding a complaint. The Mortgage Code Compliance Board specifically stated it IS good advice to recommend it and even went to so far as to advocate getting a disclaimer from any borrower who refused it - because they risked losing their home if they could not meet repayments.

    In addition, a substantial proportion of mortgage business is submitted by brokers and they, rather than the lender arrange the PPI.

    LloydsTSB, by contrast, sold more personal loans than Halifax and did so directly to customers. So it had more scope tomissell.

    We have had cases where customers have had severe pre existing medical conditions and where they have been self employed and cases are still rejected by Halifax.

    Most PPI will cover the self-employed for loss of work so unless you have evidence that it would not, a rejection on those grounds would be a non-starter.

    In addition, being self-employed does not stop you from falling ill.

    So simply being self-employed will not automatically mean that PPI is unsuitable for you.


    Similarly, the fact that a person has an existing medical condition does not mean that they are not at risk of losing their job - or of suffering an unrelated illness or injury.

    FSA rule ICOBS5.1.2R(2) covers this issue. It says "if, at any time while arranging the policy, it finds that parts of the cover do not apply, inform the customer so he can take an informed decision on whether to buy the policy."

    But but the seller will only find that there are circumstances in which cover will not apply if the buyer tells them.

    So unless you can show that the seller was made aware of the medical condition and the buyer was not aware that this would not be able to be claimed for there would be no missale.

    With a mortgage, disclosure of a medical condition is more likely because they may be seeking life cover. However, that would lead to a discussion about how it prevents cover being taken so if there was evidence of that I would normally conclude, on the balance of probabilities, that the customer was aware that the existing condition was unlikely to be covered.
    Also of the 8% that Halifax have upheld the average pay- out was £385.:p So you can see it is a numbers game now.
    That may reflect a commercial decision that it is cheaper to pay out on smaller cases.
    This I feel would show that unfortunately yes they are rejecting complaints incorrectly.

    They may, or may not, be rejecting complaints incorrectly. However, your reasons do not hold water.
    In relation to sending complaints to banks with no PPI I agree too many people are making enquiries and just hoping for the best. However Natalie Ceeney Chief Ombudsman recently said in her letter to the treasury " is it really fraudulent for a customer to ask there bank if they simply had ppi?" Which means nothing will probably be done about this.
    Asking "did I have PPI?" is a question. The answer is either yes or no. I have never said that is fraudulent.

    However, claiming you were missold a policy when you do not even know if you had it is.
    only 10% of complaints have been processed according to the FOS so we can all see how this goes over the next 3-4 years

    The judicial review caused a lot of complaints to go to FOS that might otherwise not have done because the banks wanted to await the outcome but the FSA insisted that they must allow complainants to go to FOS after eight weeks.

    Once those cases got into the FOS queue, the banks could simply wait for FOS to deal with them. So they were instead able to get on with the new cases coming in.

    What would be interesting to know is what proportion of the cases now being rejected are subsequently overturned by FOS. I am sure it will not be nil - but I suspect it will be far lower than it has been.
  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    By that logic, Jimmy SO VILE never committed any offence because no judge ever said he did and, because he is now dead, never will.

    It IS an offence, even if the offender has got away with it.

    Oh - and both fraudsters and child molesters are tried by juries, not judges.

    Juries only decide guilt. They do not make decisions on whether a law applies - ie if a bogus PPI complaint engages fraud - only judges can do that.

    You keep saying it IS an offence as a matter of fact but that is entirely speculative and amounts to 'guilty until proven innocent'.
  • pop_gun
    pop_gun Posts: 371 Forumite
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    That's not "randomly applying PPI without permission" of course. As you said, I have mentioned that particularly noxious habit in other posts-but it didn't apply here.

    I'm also not a Financial Adviser, by the way.

    We know :)
  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
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    pop_gun wrote: »
    We know :)
    Interesting that you should respond to a remark I made (more than a week ago) aimed at "CMC operator". I wonder why that might be?
  • magpiecottage
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    Juries only decide guilt. They do not make decisions on whether a law applies - ie if a bogus PPI complaint engages fraud - only judges can do that.

    You keep saying it IS an offence as a matter of fact but that is entirely speculative and amounts to 'guilty until proven innocent'.

    Section 1 of the Fraud Act says

    "(1)A person is guilty of fraud if he is in breach of any of the sections listed in subsection (2) (which provide for different ways of committing the offence).
    (2)The sections are—
    (a)section 2 (fraud by false representation),"

    Note that it doesn't say "A person is guilty of fraud if a judge (or a jury" says he is."

    My point remains the same. If you commit the offence you run the risk of being convicted.
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