RBS and Lloyds refuse no quibble PPI payouts
Royal Bank of Scotland and Lloyds Banking Group will not follow in the footsteps of Barclays and offer automatic payment protection insurance payouts, it has been revealed.
Customers whose complaints were put on hold during the Judicial Review or those who put in a complaint before 20 April will now see their claims resolved and paid out in full as a "gesture of goodwill without any admission of liability".
However, government-backed banks Lloyds Banking Group and RBS will not take this approach. Instead, both will assess claims on a case-by-case basis.
A clear response
Kath Allen, spokesperson for RBS, says: "We are taking active steps to process all complaints within the Financial Service Authority's (FSA) timeframes. We remain focussed on making sure our customers get a fair outcome within those timeframes."
Anyone who made a claim before 20 April will have a decision by 31 August.
PPI complaints received after 21 April but on or before the 31 August will be responded to within 16 weeks and PPI complaints received on or after 1 September and before December 31 will be responded to within 12 weeks.
Charlotte Sjoberg, spokesperson for Lloyds Banking Group, says: "We are handling all PPI complaints fairly and consistently regardless of when they were received. We will ensure that we provide a clear response to every customer that has submitted a complaint to us before 6 May by the end of August.
"For customers who have submitted a complaint on or after 6 May, will we provide a full response within 16 weeks of receiving the complaint."
In December last year the FSA issued guidelines on the selling of PPI, explaining when a customer could claim for being mis-sold a policy. It told the banks to apply these guidelines retrospectively. This meant thousands of customers who had already been sold PPI could claim compensation.
The banks claimed this was unfair and the case went to court but on 20 April the judge ruled in favour of the FSA and, eventually, the banks decided not to appeal the decision.
Will you be claiming PPI insurance from your bank? Share your thought here.
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.