Lloyds PPI Storm - Can We Do Anything?

hillscrimer

I've just been reading that Lloyds have once again been trying to swindle folk out of money by issuing refunds to people that are less than what they were supposed to receive. My father-in-law received a refund 6 weeks ago from them so I'm wondering whether he may have been involved.

Is there anything he can do to check whether they have paid him back what he was entitled to? If they haven't is there anything he can do to get what's owed to him? From what I gather they've found a legal loophole so I'm not sure where he would stand.

dunstonh

I've just been reading that Lloyds have once again been trying to swindle folk out of money by issuing refunds to people that are less than what they were supposed to receive.

I read it too. A really bad media article that completely got it wrong.

Lloyds have done nothing wrong and the redress method they are using is correct for people in that situation (it is actually specified by the regulator).

Where a complaint is not found to be upheld (i.e. no identifiable wrongdoing) but the product was set up as single premium PPI instead of monthly, the firm should offer redress on the difference between the two (monthly being cheaper). That is what Lloyds are doing and what all banks/firms should be doing. Most are not. So, it is actually strange that Lloyds have been accused like this when doing it right when others are not doing it right.

hillscrimer

Fair enough, thanks for clearing that up for me. It's pretty shocking that certain "reputable" newspapers are running this story.

EvaCustard

dunstonh wrote: »

I read it too. A really bad media article that completely got it wrong.

Lloyds have done nothing wrong and the redress method they are using is correct for people in that situation (it is actually specified by the regulator).

Where a complaint is not found to be upheld (i.e. no identifiable wrongdoing) but the product was set up as single premium PPI instead of monthly, the firm should offer redress on the difference between the two (monthly being cheaper). That is what Lloyds are doing and what all banks/firms should be doing. Most are not. So, it is actually strange that Lloyds have been accused like this when doing it right when others are not doing it right.

Thanks for the info Dunstonh and thank you to the OP for starting this thread.

I had an loan with Barclays that had the single premium PPI, I complained but the complaint was not upheld.

I might just contact them to see if my case will be considered under this issue.

dunstonh

hillscrimer wrote: »

Fair enough, thanks for clearing that up for me. It's pretty shocking that certain "reputable" newspapers are running this story.

I know. i watched in sky news last night when they were doing a review of the papers and the two people on the panel didnt have a clue about the subject and got the wrong end of the stick from the article as well.

For reference, the FSA paper on redress states (copy and paste):

Principles of redress
3.21 Our proposals for redress, as revised in CP10/6, were essentially as follows:
• if the firm concludes that, notwithstanding any failing, the customer would still
have bought the PPI they did, then no redress will be due;
• if the firm concludes that the customer would not have bought the PPI then
the firm should reimburse the customer for the amount of premium paid (plus
interest); and
• where the firm concludes (for particular failings related to single premium PPI) that
the customer would have bought a regular premium policy instead then the firm
should give redress that, as far as possible, puts the customer in the position they
would have been in if they had done so (we called this a ‘comparative approach’).


---
The FOS have published a guide on this: http://www.financial-ombudsman.org.uk/publications/technical_notes/PPI-comparative-redress.pdf

Both the FCA and FOS say they are allowed to do it. Which? say they are allowed to do it. It just has to be done fairly.

People with single premium loan PPI rejections should go back and ask why the bank hasnt converted it to monthly premium in accordance with regulator guidelines.

Insider101

I have read the article in question and it really is absolute nonsense. Must be a slow news day when something that is badly written, factually incorrect and shows such a lack of understanding gets published so widely.

As Dunstonh said, alternative redress is not a "loophole" (which is what happens when rule makers attempt to stop something but write the rules poorly so that people can still get around them). It is an approach expressly permitted by the FCA as appropriate for situations where the customer was eligible for the cover and not unfairly impacted by the restrictions, but was not aware of the full amount which it would be costing them. In those circumstances, there is no reason why they should have a full refund since they have had the benefit of the cover, however, the difference in cost between the policy they had and a regular premium alternative is what is offered.

I am no massive fan of Lloyds banking group but I find it strange that they have been singled out for criticism. Pretty well all of the major providers who sold single premium PPI now consider alternative redress as a prospective approach to a complaint. The other issue is that every decision letter should state clearly what they have decided, how the redress is calculated and why. Hence, unless they have made a !!!! up, it is not possible to not be aware that an offer made was not a full refund.

Insider101

EvaCustard wrote: »

Thanks for the info Dunstonh and thank you to the OP for starting this thread.

I had an loan with Barclays that had the single premium PPI, I complained but the complaint was not upheld.

I might just contact them to see if my case will be considered under this issue.

I wouldn't get your hopes up. Primarily because there is no issue. Banks are entitled to offer alternative redress if they feel it appropriate. It would not affect complaints that were rejected outright.

The decision letter should have explained why they were not upholding the complaint. Either wrote back with your reasons for disputing it or contact the FOS (if its still within six months)

magpiecottage

Insider101 wrote: »

Either wrote back with your reasons for disputing it or contact the FOS (if its still within six months)

Go straight to FOS if the six months is running out as the bank will be strict on it.

I have had cases where a complainant has spent the entire six months (and more) arguing the toss with me. Rather than get into a protracted argument with FOS (which would cost my client) they have simply timebarred it.

WatchMan

Badly reported story.

There are sometimes issues with this type of redress - sometimes it isn't a fair offer and instead a full refund should be given. If Lloyds have been making an unusually high number of offers of "alternative redress" where it would not be fair, then that is news worthy.

However from what I have read this isn't the case. Instead, the articles just seem to suggest that any offer of this kind is always bad and underhand - which isn't true.