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Tuesday, April 23, 2013

Banks Delay PPI Claims

In March I noted that the financial ombudsman service (FOS) was taking on 2,000 new PPI complaint cases a day, with numbers rising at "unprecedented" rates.

I went on to note that it was clear that the banks were trying to delay payouts:
"Needless to say, as the number of referrals to the FOS rises, so does the length of time it takes for the ombudsman to make a determination. It seems that the delays are also increasing because some companies are causing unnecessary delays.

Natalie Ceeney, chief financial ombudsman, is quoted by the BBC:
"As the complaint levels show no sign of slowing, consumers are increasingly having to wait longer to get their complaints sorted - with many businesses still continuing to cause unnecessary delays.
Where businesses have shown a real commitment to better customer service and diligent complaints handling - including actively engaging with the ombudsman - cases are resolved more quickly and easily, to the benefit of everyone."
None of this is surprising, those who were sold PPI will see this as an opportunity to try to obtain a refund (irrespective of whether they were mis-sold PPI or not) and the banks will do everything they can to try to reduce the costs of the claims.

That being said, had the banks not incentivised their staff to sell policies that were in many cases clearly inappropriate to people who didn't need them/couldn't claim on them when they needed to, then this entire mess could have been avoided.

The greed of the banks is now being repaid by the perspective that the banks' customers have that there is "free" money to be made.
As the old saying goes, "what goes around, comes around".
A claims management company, Emcas, has now also said that banks are rejecting around a third of claims from customers. Ironically, as per the Telegraph, the Financial Ombudsman Service (FOS), which deals with complaints rejected by the banks, is upholding the majority of PPI claims.

Why such an anomaly?

A cynic would argue that the banks are trying to slow things down in the hope that those claiming simply give up.

Needless to say the British Bankers' Association denies that banks were deliberately turning down legitimate claims in the hope that they would avoid having to pay up.

Make of that what you will.

Irrespective of what obstacles (real and imaginary) are put in your way by the banks, do not give up; if rejected by the bank make a claim direct to the FOS, do not use a claims management company (which will charge you a percentage of any compensation that you receive).

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