Barclays promising 'no quibble' PPI payouts
Barclays has promised to pay out some of its customers' payment protection insurance complaints on a quibble-free basis.
Barclays customers whose complaints were put on hold during the Judicial Review will now see their claims resolved and paid out in full as a "gesture of goodwill without any admission of liability".
Those eligible for the full payout must have filed their complaint before 20 April this year and will receive a letter from Barclays notifying them of the Bank's move. They will then receive a further letter by the end of August with details of payment. Refunds will cover the cost of PPI premiums and any interest paid on these premiums plus a further 8% interest, minus the value of any previously successful claims.
Barclays chief executive Bob Diamond previously apologised to customers for the mis-selling scandal, saying: "We don't always get things right for our customers; when we get them wrong, we apologise and put them right."
The bank has since issued a statement saying: "Working in close co-operation with the FSA [Financial Services Authority] and the FOS [Financial Ombudsman Service], and in recognition of the delay customers have experienced whilst awaiting the outcome of the High Court judgment, we can confirm that we are contacting customers whose complaint was put on hold on or before 20 April with an offer to settle their complaint in full as a gesture of goodwill."
Barclays says it will be "business as usual" for PPI complaints received after April 20. PPI claims will be addressed within 16 weeks, according to the FSA and FO's agreed temporary extension to handling times. This resolution period will then reduce to 12 weeks for complaints received between 1 August and 1 October 2011 and back to the standard eight weeks from 2 October onwards.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.