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PPI Update: £1.9bn has been paid in compensation to people mis-sold Payment Protection Insurance. The Financial Services Authority (FSA) has revealed that £1.9bn has been paid in compensation to people mis-sold Payment Protection Insurance. PPI was supposed to cover loan repayments if someone lost their job or fell ill, but thousands were mis-sold the policies. Jason Billingham was one of those mis-sold PPI and he told the BBC how difficult he found it to get his money back.
IBAS Comment: But, did he get all his money back? – he says it just appeared in his account – did he know that it was correct? Did he just take the banks word for it? IBAS has seen cases where the money offered by the bank was both inaccurate and/or miscalculated - and where it took a further two attempts to obtain the correct amount …and months later. The moral is: Do not accept the bank’s first ‘offer’ - unless you have seen the evidence of calculations to prove the offer is correct and properly calculated. You only have the one chance to make sure the bank pay ‘compensation’ or ‘redress’ for what is owed to you on PPI claims. - 25.02.12
PPI the Banking ‘Scam’ that became a Public Relations Disaster
The banking industry has abandoned their legal fight over the mis-selling of payment protection insurance (PPI). The BBA, the trade association, representing major banks has said it would not appeal against new rules on mis-selling.
The FSA has won this battle and we should all applaud that victory.
PPI has been a Public Relations disaster for the UK banking industry. IBAS has seen the evidence of banks mis-selling PPI over many years. Bank loans and overdrafts were ‘sold’ with ‘up front’ payments for PPI premiums, without choice – which also meant further interest for the bank on an already costly and non-performing product.
PPI has made incredible profits for banks over a very long period. If bank customers had received good value protection there would not have been this PR disaster. The FSA has estimated that the banks will pay up to £4.5bn to settle tens of thousands of claims. To date Lloyds Banking Group has made a £3.2bn provision for possible claims, Barclays has set aside £1bn to pay compensation and HSBC £269m – so the figure is already above £4bn from just three banks. IBAS expect the true cost to be around £10bn – but that’s assuming compensation will be paid to those to whom it is owed.
However, the banks have resisted all claims so far. Only now when they cannot see another way out of this mess have they admitted their problem with mis-selling PPI and they will now attempt to turn the PR disaster into a PR bonus.
However, banks do not give up money easily or at all and they will diminish or resist PPI claims where they can. Where they cannot resist the claim itself, they will inevitably attempt to diminish the value of that individual claim by applying pressures on the customer and the Financial Ombudsman Service.
Also, where the banks previously refused to commit staff to deal with complaints on PPI they will now ‘refocus’ their activity and employ more staff to ‘fight’ the PPI mis-selling claims. Banks are masters at this process; they manoeuvre and just fight on in a different way.
If you have bank shares no doubt you would applaud such actions - but the banks have resisted changes and cheated customers for too long. They have manipulated the legal system, regulators and successive governments to achieve massive profits, using PPI and other ‘scams’ to increase bank profits, whilst continually ‘ripping-off’ customers.
Banks are greedy and PPI was a perfect vehicle for huge profits – with little risk. But, customers found that many PPI policies never ever paid out, particularly when they urgently needed the ‘cover’ that was sold them. The banks deliberately resisted and mishandled the complaints on PPI, which has been a historical habit.
Only now in 2011 has the bank’s disgraceful conduct been brought to an end. Let’s all hope it is not an end to this process of bank education - but just a beginning.
Written by Eddy Weatherill, CEO of IBAS, The Independent Banking Advisory Service Published in Fresh Outlook 12 th May 2011
Note at 21st December 2011: More than £1bn was paid in compensation in the first 10 months of the year to people who were mis-sold payment protection insurance (PPI), financial watchdog figures show.
IBAS is the most experienced organization in this field with almost 20 years 'track record' in Banking cases and resolving Director's Personal Guarantee issues. Our aim is to provide the best professional and personal Banking and Personal Guarantee advice service to protect our members at a low affordable annual membership. IBAS offers specialist and individual Banking and Personal Guarantee advice and assistance and will assess your personal position to establish how your banking dispute or Personal Guarantee may impact upon you and also your family. Our first action is always to protect your personal position and prevent it being compromised further by any ill advised action with regard to the banking dispute or Personal Guarantee you have already signed.
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