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Has the PPI Clock Started Ticking?

Posted on: March 4th, 2014 | Author:

Has the PPI Clock started ticking?

April 2014 is the date the UK banks have asked the FSA  to set the deadline for all further claims for PPI compensation. The FSA have said that they will consider the deadline only if it is in the interests of its customers and banks start to process PPI claims efficiently.

However there is a strong concern that banks are failing to handle the complaints fairly. The Financial Ombudsman who deals with complaints that the banks have failed to resolve has hired 1000 extra members of staff to deal with the high number of complaints.

A number of banks have been fined by the Financial Services Authority (FSA) for delaying PPI redress or not dealing with PPI complaints correctly.

Lloyds was fined by the FSA in February 2013 for delaying compensation payouts to 140,000 customers. Lloyds customers did not receive their compensation promptly most waiting over 6 months for pay outs that should have been resolved within 28 days. Lloyds blamed the huge influx of claims which they had not anticipated and administrative errors due to new systems

The Co-operative was also fined in January 2013 for stalling PPI claims. In 2011 The Co-operative put 1629 PPI complaints on hold when the Banking Industry was in High Court challenging the FSA’s new PPI rules.

Tracey McDermott, the FSA’s director of enforcement and financial crime, said: “The FSA made it clear that firms must continue to process complaints where possible during the judicial review and we warned that enforcement action could be taken if this was not done.

However the Co-op put complaints on hold during the legal proceedings despite the warning, meaning a significant number of people had their valid complaints delayed for no good reason.

The British Bankers’ Association (BBA) has been in talks with the FSA for several months about imposing a cut-off point for claims in an attempt to provide some certainty on the industry’s vast compensation bill. But the FSA’s initial response was cautious: “Our key priority is to ensure consumers are protected, so the FSA Board would need to be convinced that any proposals would be in the interests of consumers,” it said.

PPI is the insurance that was sold alongside loans and credit cards to cover repayments if the borrower was unable to because of unemployment. It was widely mis-sold with the costly policies pushed onto many would never be able to make a claim.

PPI is now the biggest financial mis-selling scandal of all time and the banks have a duty to right this wrong. If you’ve been mis-sold PPI and still need to make a claim Crystal Legal Services can help you reclaim the correct and maximum compensation available. Call us today for friendly professional advice on 01270 44 66 44 or submit an online enquiry form and one of our PPI specialist will contact you shortly.