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MSE News: Lloyds 'wrongly rejecting PPI claims'

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  • JuicyJesus
    JuicyJesus Posts: 3,830 Forumite
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    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.

    Say a customer alleges, falsely, that the person who sold them their personal loan put them under pressure to take out the cover and said it was mandatory. Or that their signature was forged on a PPI form and added cover which they did not want or need. Both of these have come up on this forum.

    These are specific allegations against the bank and its staff. Very specific allegations of deliberate wrongdoing. The bank will most likely take them exceptionally seriously - especially in the latter case. This might induce them to offer compensation/redress for misselling. There is no proof either way, but the bank may be inclined to give the customer the benefit of the doubt (stranger things have happened.)

    The customer has lied through their teeth, if not just fabricated things, indeed besmirching the name of a potentially innocent member of staff, in order to obtain a payout. That is obtaining (or attempting to obtain) a pecuniary advantage through deception, which I believe is the dictionary definition of fraud.

    For a less exotic case, take people who say "I was told I had to take out PPI to get the loan" when they never actually had it or applied online and so nobody could have told them anything. They are lying in order to try to get a payout. Pecuniary advantage through deception - fraud. Note also that one does not have to actually obtain the pecuniary advantage to have committed fraud, merely attempting to is enough, meaning that even if the bank doesn't pay out it's still fraudulent.
    urs sinserly,
    ~~joosy jeezus~~
  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    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."

    QUOTE]

    Yes I do note it doesn't say that because it assumes that people realise that only a judge can give effect to it.
  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    edited 9 November 2012 at 8:18PM
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    JuicyJesus wrote: »

    The customer has lied through their teeth, if not just fabricated things, indeed besmirching the name of a potentially innocent member of staff, in order to obtain a payout. That is obtaining (or attempting to obtain) a pecuniary advantage through deception, which I believe is the dictionary definition of fraud.

    I'm not sure where your going with this. The money wasn't obtained through deception because, as your example demonstrates, the bank weren't deceived into giving the money - they gave the customer the benefit of the doubt.

    If bogus PPI complainants were really capable of being prosecuted for fraud or attempted fraud, then why aren't they? The answer has to be that there is no realistic prospect of sucess.
  • JuicyJesus
    JuicyJesus Posts: 3,830 Forumite
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    If bogus PPI complainants were really capable of being prosecuted for fraud or attempted fraud, then why aren't they? The answer has to be that there is no realistic prospect of sucess.

    Or that no bank wants to be the one seen to shop its own customers for fraud in the middle of the misselling debacle.
    I'm not sure where your going with this. The money wasn't obtained through deception because, as your example demonstrates, the bank weren't deceived into giving the money - they gave the customer the benefit of the doubt.

    There is an element of deception though. The complainant is saying something they know not to be true in order to extract money. Even if they do pay out, the fact remains that even attempting to do so qualifies as fraud if the complaint is made under knowingly false pretences.
    urs sinserly,
    ~~joosy jeezus~~
  • [Deleted User]
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    JuicyJesus wrote: »
    no bank wants to be the one seen to shop its own customers for fraud in the middle of the misselling debacle.
    Yes, I agree the publicity surrounding any such move by the Banks would probably be very counter productive.


    JuicyJesus wrote: »
    There is an element of deception though. The complainant is saying something they know not to be true in order to extract money.
    Aside from all that, it also ties up the Banks from dealing in a more timely fashion with the many many genuine complaints.
  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    JuicyJesus wrote: »
    Or that no bank wants to be the one seen to shop its own customers for fraud in the middle of the misselling debacle.



    I don't believe that for a heartbeat.

    Besides, if I were a bank that thought it had a realistic shot of success I'd target a CMC - which would actually attract overwhelming support from the public.
  • JuicyJesus
    JuicyJesus Posts: 3,830 Forumite
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    I don't believe that for a heartbeat.

    I do. I can see the Daily Mail headline now: "After ripping off thousands with mis-sold PPI, XYZ Bank now targets its own customers for trying to reclaim". It'd be a reputational minefield.

    For that reason, and that reason alone, I do not think there will ever be a prosecution for fraud from a bank to a customer putting in a fraudulent PPI complaint. But the fact remains that if you're telling lies in order to extract money, you're committing fraud.
    Besides, if I were a bank that thought it had a realistic shot of success I'd target a CMC - which would actually attract overwhelming support from the public.

    The issue there is that the reputational risks are roughly the same (big nasty bank that ripped off millions vs. company that sticks up for the little guy - think that advert with the little plasticine dog with the broken leg and you can see which way the coverage will be), it's free publicity to the claims company (who can then play the victim - see above - and might win business from it) and at the end of the day it's the customer's complaint which they have put their name and signature to, and it's the customer looking to commit the fraud. Even if you do it through a third party, it doesn't change the intention.

    I'd love to see it happen though.
    urs sinserly,
    ~~joosy jeezus~~
  • Alpine_Star
    Alpine_Star Posts: 1,356 Forumite
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    JuicyJesus wrote: »
    I do. I can see the Daily Mail headline now: "After ripping off thousands with mis-sold PPI, XYZ Bank now targets its own customers for trying to reclaim". It'd be a reputational minefield.

    For that reason, and that reason alone, I do not think there will ever be a prosecution for fraud from a bank to a customer putting in a fraudulent PPI complaint. But the fact remains that if you're telling lies in order to extract money, you're committing fraud.


    I'm sorry but this is just nonesense.

    Banks litigate against their customers all the time. On any given day there are dozens of cases listed in courts up and down the country where the claimant is a high street bank and the defendant an individual customer of that bank. They turf little old women out their homes and bankrupt the poor every day of the week without the Daily Mail blatting an eyelid.

    Are you seriously suggesting that prosecuting someone who attempted to 'dishonestly extract money' (your words not mine) from a bank would somehow attract a negative media response?

    It's so easy to say that ''the fact remains that if you're telling lies in order to extract money, you're committing fraud'' but it's not nearly as simple as that. Fraud cases are notoriously difficult to bring as the burden of proof is significantly higher than other areas of criminal law.
  • [Deleted User]
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    JuicyJesus wrote: »
    I do. I can see the Daily Mail headline now: "After ripping off thousands with mis-sold PPI, XYZ Bank now targets its own customers for trying to reclaim".
    I think this is without doubt the reason the Banks make no (public) comment about non-legitimate complaints in which the complainants don't even have PPI.
    Makes sense to me.;)
  • -taff
    -taff Posts: 14,757 Forumite
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    RagTrade wrote: »
    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.

    Nope, not in my experience anyway. The last time I had a loan, the advisor/saleswoman came right out and told me the way i was sold PPI was completely wrong and I should complain about it.
    I did, nothing was upheld.
    Shampoo? No thanks, I'll have real poo...
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