Legal & general mppi

Insider101

saver861 wrote: »

The whole PPI thing is an exception to the regular workings of financial services and complaints etc. Therefore, it may be as things return to the norm, the current model is sufficient to continue.

Maybe that's unfortunate for those brokers and IFA's as well as those with genuine complaints being held up by try-it-on complaints. One thing is for sure, as long as it remains the cost of a stamp, the try-it-on's will continue - not rocket science.

True, but what I was getting at was that FOS can't just decide to charge a complainant. The FCA would need to change its rules otherwise FOS has no power to require payment from a complainant.

If it was up to me then CMC complaints for a start would be losers pays.

When you say "they want their money" ... do you mean the FOS? That is to suggest that they may be disinclined to reject claims or waive fees, because they have a vested financial interest in collecting the fees? Hardly transparent then ....

Yes. The FOS itself is a limited company. It wants to make a profit. Therefor not wanting to waste time looking at a case and not get paid for it.

How is the FOS funded? The reason we have a police service is to reduce crime. If, hypothetically speaking, they were 100% successful and eradicated crime, most police officers would be out of a job! Increasing crime rate = police job security!

It's overheads are funded by annual levies on authorised firms which deal with eligible complainants. It's case fees are funded by a per case charge of £550 per case on the firm, charged whether the complaint is upheld or not. Or £900 where the case is a PPI misselling one.

Supposedly the increase in fee for PPI cases is to encourage banks and their customers to reach agreement off their own back. In reality it is simply blatant profiteering and serves only to turn a supposedly independent arbitrator into a blackmail tool for ambulance chasers.

While obvious spurious complaints are not to be encouraged, I think many financial proessionals bemoaning the fact it happens don't really have my sympathy. The financial sector is to blame for the occurrence of PPI anyhow, and it would seem it is their failings the spurious claims are not dealt with more effectively. Sort it or put up with ...

Too much generalising here. "The financial sector" comprises everything from banks to IFAs to hedge funds to mortgage providers. The truth is it is a very small minority of regulated firms who have any significant involvement in the PPI saga.

saver861

Insider101 wrote: »

True, but what I was getting at was that FOS can't just decide to charge a complainant. The FCA would need to change its rules otherwise FOS has no power to require payment from a complainant.

I understand that - any change in procedures would have to be escalated and approved - not a simple task.

Insider101 wrote: »

If it was up to me then CMC complaints for a start would be losers pays.

Sensible - given as such these companies are professional's and should be making objective judgement. Not likely of course ...

Insider101 wrote: »

Yes. The FOS itself is a limited company. It wants to make a profit. Therefor not wanting to waste time looking at a case and not get paid for it.

Not entirely independent then ... that's the financial sector's problem, not Joe Public's.

Insider101 wrote: »

It's overheads are funded by annual levies on authorised firms which deal with eligible complainants. It's case fees are funded by a per case charge of £550 per case on the firm, charged whether the complaint is upheld or not. Or £900 where the case is a PPI misselling one.

Supposedly the increase in fee for PPI cases is to encourage banks and their customers to reach agreement off their own back. In reality it is simply blatant profiteering and serves only to turn a supposedly independent arbitrator into a blackmail tool for ambulance chasers.

Well, my understanding is that more than 60% of cases are upheld by FOS. If we assume these are absolutely valid, then it is way, way, way, way too high. It means 60% of the cases put to banks etc are rejected to get out of paying! Absolutely right they should be hit with a sufficient reminder of their obligations - not blackmail at all. How is it any different for the bank to reject a valid complaint than for a consumer to make a try-it-on complaint.

Using those figures, even if all the other 40% are try-it-on complaints, then it is still less than the quantity being rejected by the banks etc.

Insider101 wrote: »

Too much generalising here. "The financial sector" comprises everything from banks to IFAs to hedge funds to mortgage providers. The truth is it is a very small minority of regulated firms who have any significant involvement in the PPI saga.

Not so. The health profession comprises of many different components but the underlying requirement for all is the well being of the patient. Similarly so for the 'financial sector' - there is an overall obligation to the consumer regardless of the actual product being sold. PPI is only one small area of the financial sector as is the fracture clinic of the healh sector.

addedvaluebob

Good point about the uphold rates, and if you look at some company statistics the FCA should adopt a position of guilty until proven innocent for some of the banks etc and let them argue why they shouldn't pay out not make the customer try and prove the case

Insider101

saver861 wrote: »

Well, my understanding is that more than 60% of cases are upheld by FOS. If we assume these are absolutely valid, then it is way, way, way, way too high. It means 60% of the cases put to banks etc are rejected to get out of paying! Absolutely right they should be hit with a sufficient reminder of their obligations - not blackmail at all. How is it any different for the bank to reject a valid complaint than for a consumer to make a try-it-on complaint.

Using those figures, even if all the other 40% are try-it-on complaints, then it is still less than the quantity being rejected by the banks etc.



Not so. The health profession comprises of many different components but the underlying requirement for all is the well being of the patient. Similarly so for the 'financial sector' - there is an overall obligation to the consumer regardless of the actual product being sold. PPI is only one small area of the financial sector as is the fracture clinic of the healh sector.

I am not sure about the overall figure. It varies wildly from under 20% for some firms (Nationwide, Capital one) to over 90% for some (MBNA, Black Horse) last I remember seeing. In the middle are firms like RBS, Barclays who I think have 35-50% nowadays. That is solely for PPI. I think last I heard overall rates were about 40% for non PPI complaint upholds.

You need to appreciate here that not everything is black and white. There are massive shades of grey. Not everyone who has a complaint rejected is trying it on and not every bank that rejects a complaint is rejecting it just to get out of paying. It is an extremely subjective issue and there are plenty of legitimate disputes where both sides consider they have a legitimate case. Whilst most banks (by now) have a pretty good idea how the FOS would decide in a lot of circumstances, every case is different. That is what the FOS is for, to decide on those cases.

I think you've maybe missed the point on the blackmail thing. What I meant was I have seen any number of cases where CMCs have responded to defended cases by writing back pointing out that they will go to FOS and the bank will need to pay the fee. Because the fee has been raised to a level where it is clearly disproportionate to the work involved (more so when you consider the FOS has defined policies on PPI and many response are very standardised), the banks are often put in a position where it is cheaper to pay out regardless of whether or not they are in the wrong. That's what I meant and that's why I think CMCs should pay for cases they lose.

I don't see the comparison with the NHS thing I am afraid. You wouldn't blame a brain surgeon if someone was the victim of medical malpractice in the fracture clinic. Same applies here in my view.

saver861

Insider101 wrote: »

I am not sure about the overall figure. It varies wildly from under 20% for some firms (Nationwide, Capital one) to over 90% for some (MBNA, Black Horse) last I remember seeing. In the middle are firms like RBS, Barclays who I think have 35-50% nowadays. That is solely for PPI. I think last I heard overall rates were about 40% for non PPI complaint upholds.

These are from the individual banks ... a rouge average would give around 60%.

Insider101 wrote: »

You need to appreciate here that not everything is black and white. There are massive shades of grey. Not everyone who has a complaint rejected is trying it on and not every bank that rejects a complaint is rejecting it just to get out of paying.

Oh absolutely - many cases will be very subjective and it is down to the person in the middle to decide. In line with most disputes, nothing is ever clear cut to one side or the other. However, 60% uphold rate by the FOS would indicate that there is neglience on the parts of the original compaint to the banks etc.

Insider101 wrote: »

I think you've maybe missed the point on the blackmail thing. What I meant was I have seen any number of cases where CMCs have responded to defended cases by writing back pointing out that they will go to FOS and the bank will need to pay the fee. Because the fee has been raised to a level where it is clearly disproportionate to the work involved (more so when you consider the FOS has defined policies on PPI and many response are very standardised), the banks are often put in a position where it is cheaper to pay out regardless of whether or not they are in the wrong. That's what I meant and that's why I think CMCs should pay for cases they lose.

Right - I don't disagree there. I think my points and posts are in relation to individual consumers making PPI complaints. I think all on here agree CMC's are nothing more than legit twisters.

The gist of many posts on threads is about consumers making spurious claims to the extent of putting brokers etc out of business. While not supporting obvious try-it-on complaints, my point is that such posts being made make it seem its the consumers that are at fault. Too much bemoaning that 'people are making spurious complaints' - thus my point it is the financial sectors problem, not the consumers, notwithstanding two wrongs will never make a right.

Insider101 wrote: »

I don't see the comparison with the NHS thing I am afraid. You wouldn't blame a brain surgeon if someone was the victim of medical malpractice in the fracture clinic. Same applies here in my view.

My point is that there are generic procedures for the whole industry. A bank has an obligation to ensure the correct procedures, advice, guidance etc is applied whether the consumer is buying a mortgage, PPI, opening an account or buying insurance. So a bank claiming to put the customer first on its mortgage or current account sales, needs to ensure the same generic procedures for PPI etc. which has spectacularly failed.

While my knowledge of brain surgery is not paticulary adept , the overall patient care, procedures, diagnosis, quality control etc is generic and thus need to be applied accordingly across the board, from brain surgery to fracture clinic any beyond. The finer detail of the intricacies of the brain surgery itself would be in the detail for that specialism.

Nasqueron

addedvaluebob wrote: »

Good point about the uphold rates, and if you look at some company statistics the FCA should adopt a position of guilty until proven innocent for some of the banks etc and let them argue why they shouldn't pay out not make the customer try and prove the case

Spurious response:

You owe me £1000 that I loaned you last week, pay up or prove you didn't borrow it in cash.

Assuming guilt on past performance makes for an unfair system for all. Should we equally auto reject all future complaints from a customer whose case was rejected as try it on?

addedvaluebob

I think you may have missed the word 'some'. Just a quick look at the FOS stats shows 3 companies that lose 90%+ of their PPI cases. Clearly they cannot defend the mis-sold PPI policies and are just using the complaints team to convince people it wasn't mis-sold rather than holistically reviewing the case. These are the companies that should be judged as guilty first.

Yes I know it is not fair but at least might send a shot across the bows to get more customers treated fairly

[Deleted User]

addedvaluebob wrote: »

Just a quick look at the FOS stats shows 3 companies that lose 90%+ of their PPI cases. Clearly they cannot defend the mis-sold PPI policies and are just using the complaints team to convince people it wasn't mis-sold rather than holistically reviewing the case.

If they lose 90% of cases referred to FOS then they should be looking at their complaint handling themselves. Surely the £850 FOS fee they pay for each of these cases, paid in addition to the redress awarded to the customer, should be incentive enough?

The FOS stats also do not reveal what percentage of complaints are upheld by the firms themselves, so the 90% figure can also be misleading.

Insider101

saver861 wrote: »

These are from the individual banks ... a rouge average would give around 60%.

The most recent figures I can find are below and indicate that the overall uphold rate is 48%

http://!!!!!!!!ntswood.com/2014/03/21/new-fos-figures-ppi-uphold-reasons-and-newcomers/

addedvaluebob

Stats can say whatever you want. In a FOS report some years ago they stated that less than 20% of people who get rejected eventually get all the way through the FOS process. Undoubtedly some people are just trying it on with no knowledge but a lot also give up because they don't want go through it all again. For all the people who give up, the bank etc save on redress costs and this offsets the costs of paying the FOS referral fee.

Friends Prov did this in the endowment claim period and got fined £750,000 that they would have saved by rejecting 250 cases