Does RBS owe you £1,677 for mis-sold PPI?
As a result of the payouts, which have cost the state-owned bank £4.3 billion to date, RBS had to increase the money put aside for claims by £600 million in 2015.
But the true amount that customers will get back could be far higher, as RBS expects just 56% of people who were sold PPI will make a claim. Should the claims rate rise to 61% - aroudn three in five affected people - RBS says it will have to pay out £55 million more.
These figures highlight the importance of submitting a claim if you've been affected. Compensation could be worth well over £1,000, and there's a very high chance that claims will be successful. So far, 91% of PPI claims against RBS have been upheld in consumers' favour (excluding claims from people who never bought PPI).
This issue doesn’t just affect RBS customers; anyone mis-sold PPI can get their money back, plus interest. Only this week, for example, Lloyds Banking Group announced it has now put aside a massive £16 billion to cover mis-selling claims.
Get your money back
If you’ve taken out a loan, credit card or mortgage, check your records or contact your lender to see if you have a PPI claim. Read our checklist of people who may qualify for compensation, including a template letter to make the reclaiming process as easy as possible.
Don’t be tempted to pass the work over to a claims handler, as it’ll take about a quarter of your compensation, according to a recent report from the National Audit Office. You can do this yourself, for free.
What does RBS say?
An RBS spokesperson declined to comment further on these PPI figures, though its report states: “Like other banks, we continue to look for opportunities to resolve legacy conduct issues on terms we believe to be acceptable.
“We have recently added to our provisions in relation to residential mortgage-backed securities in the US (RMBS) and Payment Protection Insurance (PPI).”
The business, alongside several other UK banks, is also complying with the Financial Conduct Authority to identify ill-advised investment recommendations from its advice arm made between March and December 2012.
It has also put aside £307 million to settle potential claims from packaged account customers.
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.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
All limited liability companies registered in the UK are compelled by law to compile a report once a year on the company’s accounts and directors’ statements must be issued to shareholders and filed at Companies House. A report details a company’s activities throughout the preceding year and its contents will include chairman’s statement, auditor’s report and detailed financial information such as cash flow and balance sheet statements.