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July 31, 2014 
Daniel Lee News emerged this week of the increased provisions put aside by banks to cover the PPI claims which are not dwindling as fast as they’d like. In particular, the banking industry is less than pleased at the acceleration in the number of claims which relate to PPI policies sold before 2005. The response to this trend has cost the banks an estimated £1.5 billion in topping up PPI compensation funds.
Taken at face value, one could be mistaken for overestimating the decline in PPI claims. The Financial Ombudsman Service said last week that it had received 57,000 PPI-related complaints in the second quarter of the year, in comparison with 132,000 in the period last year. However, while the overall trend is one of decline, the issue which is unsettling the chiefs in City banks is the steep increase in PPI claims from the pre-2005 era, and this has led to reasonable suspicions that lenders will kick up a fuss and make revived calls for the imposition of a cut-off point for those claiming PPI.
This is by no means a new move. Indeed, the banks took the issue to a judicial review in 2011, unsuccessfully arguing for 2005 to become the cut-off point. The fact that PPI claims from before 2005 are increasing, along with the substantial top-ups necessary to compensate PPI claimants, has rattled the major banks.
It is likely to be their argument that, as they are only obliged to keep customer records for seven years, they will not have the necessary essential information relating to PPI claims from so far back. Executives at big lenders will also cite the costs of administering ‘invalid’ claims which can reach £1,000 each which they consider to be an erosion of capital.
However, it is no secret that big banks are often found rejecting valid PPI claims, seeing over a million complaints escalate to the Financial Ombudsman to step in on behalf of the victim.
Despite the fact that the Financial Conduct Authority’s chief executive, Martin Wheatley, told MPs he remained sceptical about the prospect of a cut-off point, the British Bankers’ Association (BBA) has held initial talks with the City regulator regarding a cut-off for PPI claims.
The latest tentative steps taken towards a cut-off point have been faced with hostility from consumer groups, who were also keen to kill the prospect of any deal in the wake of previous attempts by the banks.
PPI Claims
September 4, 2014 Daniel Lee Here’s the continuation from part three. We’re going to dive straight into the next post and carry on from where we left off with part three.
Let’s start this section with the following question…
I’ve already claimed on my PPI, can I still make a mis-selling complaint
It is still possible to make a complaint regarding the sale of the policy, as it is the point of the sale that is the issue and not the fact you may have made a claim against the policy. However, if the claim is successful then your award will be reduced by the amount the policy paid out.
I want to make a claim, but I want to remain protected if I fall out of work etc.
We would recommend searching the market via one of the many comparison websites out there. There are some good, and affordable polices available across the market, ranging from Payment Protection Insurance policies which cover the cost of your credit repayments, to Income Protection policies which cover your salary. If you got credit that was taken out some years ago and you have PPI on it, it’s more than likely that you’re paying way over the odds for it. You should check if you can get a better deal elsewhere:
Will my lender cancel my PPI if I make a claim?
If you start a PPI claim, the lender generally cancels the policy upon receipt of the complaint as it’s assumed if you’re complaining about it you don’t wish to have it.
I cannot remember who I had loans / credit cards / mortgages with. How can I find out?
If you find yourself in this position, you can check your credit report. On there you will find any debts that have been alive within the last 6 years, even if they’re closed now. You have a right to see any credit files for a small payment of £2 from Equifax, Experian and Callcredit.
This just about brings part four to a close. We hope you’ve found things out that will eventually prove useful if you have a PPI claim to make. Keep your eyes peeled for the next part in this series of blog posts.
PPI – Frequently Asked Questions Part 4
October 7, 2014 Daniel Lee These past few years have been a tough one for a number of different banks after numerous scandals and fixing allegations have been uncovered, such as the huge PPI scandal.
With the news this morning about the UK economy returning to the way it was prior to the collapse of the banks in the UK, there’s more news about the Royal Bank of Scotland group, which also owns Natwest, who have said that they expect pre-tax profits of £2.65bn for the first half of this year which is up from £1.37bn last year.
These figures all seem well and good for RBS but things haven’t been plain sailing for the tax payer part owned bank.
The company released the results a week earlier because they said that they were significantly stronger than what the market was expecting, however it’s not all as well as they suggest.
Despite the good reading of the headline figures, the Chief Executive of RBS, Ross McEwan has warned of “bumps in the road ahead of us”. This may be due to the fact that they were still required to set aside a large sum of money for a number of different compensation claims. As more and more scandals are uncovered we foresee difficult times ahead for the banking sector as public trust continues to decline at a worrying rate, and rightly so.
The RBS PPI compensation fund will rise by a further £150m according to the new figures released. It is virtually guaranteed that this won’t be the last time the bank adds to the fund, which has already surpassed £3 BILLION for RBS, with the overall compensation fund for the banking industry hovering around the £25 BILLION mark, and rising consistently.
RBS/Natwest have also set aside £100m for a number of other mis-selling claims such as packaged bank accounts. This is going to be something that will prove to be another scandal issue for the banks as there are millions of people who weren’t even aware that they were paying for ‘extras’ with their bank accounts such as vehicle breakdown cover, travel insurance and phone insurance.
There are also millions of people out there who are still to claim the money that they’re owed from being mis-sold PPI. The majority of these people are potentially sitting on thousands, even tens of thousands of pounds in compensation without realising, as millions of PPI policies were placed onto credit agreements without the knowledge of customers.
If you think that you may have been mis-sold PPI, or if you wish to check to see if you’ve had PPI, get in touch with us, we can find out for you in no time if you’re owed any money with our fast-track system.
RBS PPI compensation
September 4, 2014 Daniel Lee In part three of this series of blog posts we’re going to look at what you could be owed. You may be surprised at what amount of money you could claim back from being mis-sold PPI.
The average industry PPI payout currently stands around the £2500-£2750 mark. The amount that you could be entitled will depend on a number of factors, including how much you borrowed, over how long you borrowed the money, and at what interest rate. How long ago you borrowed the money is also a factor.
The simple fact is that there is no way of accurately predicting what compensation payment you are likely to get, as it’s the bank themselves who hold the exact figures.
However, our experience shows that anywhere between 10-30% of your monthly payments could have been made towards a PPI policy.
Getting a rough estimate…
As mentioned above, there is no exact calculator out there that will give you an accurate figure as to the award you could receive.
A PPI compensation offer is broken down into three entities…
Part One of your offer is simple, it’s how much you’ve actually paid towards the PPI policy. If you have paperwork it could well tell you how much per month you pay towards the policy. If it does then simple multiply this figure by the number of months you paid the loan or mortgage. If you don’t have any paperwork, and let’s face it, a large number of us won’t, then it’s estimated that between 10-30% of your monthly payments may have gone towards a PPI policy.
Part Two of the award is much more difficult to work out. This is based on the fact that you were paying interest on a false balance, because the balance would be lower had the PPI not been on there. For this you would need the APR percentage, and a full statement of account.
Part Three of the award is what is generally called the compensatory interest. This is awarded because you have been deprived the opportunity to invest or do as you see fit, with the money that your lender took away from you by charging you for PPI. For this part of the award, you need to know the annual breakdown’s for the first two parts of the award.
So, if you receive a text or a call from a company claiming to know what you’re owed please please please ignore it as it’s clearly a scam.
It is only the lender themselves who can provide the actual breakdown. We can guide you by saying if you take 10-30% of your monthly payment and multiply this by the number of months you paid the loan / mortgage, and then add around 10% onto that figure it should give you a rough estimate.
This just about concludes part three, stay tuned for part four coming very soon. If you missed the first two parts, click on the buttons below to catch up on the ones that you missed.
PPI – The Most Frequently Asked Questions Part 3
September 4, 2014 Daniel Lee According to new figures, there are up to 5,000 people still complaining to the Financial Ombudsman each week about PPI.
Two-thirds, or 67% of new complaints received by the Financial Ombudsman Service (FOS) between May and June were all about payment protection insurance. According to the Ombudsman service, last year they were dealing with 12,000 each week about PPI although the amount of issues that they were dealing with at the FOS s still 50% higher than in 2012.
Most Complained About
PPI is the most complained about product that the FOS, who deals with and resolves disputes between consumer and financial firms, has ever seen.
The mis-selling of PPI can be traced as far back as the 1990s and in some rare cases, the 1980s but there’s still been millions of people that have been mis-sold the insurance after it was added to their loans and credit card agreements without them fully understanding what it was and in some instance, not even knowing it was there.
The aim of this insurance was to help people to repay their debts if they were to become ill or lose their job. In the long run though, the vast majority of these policies were unsuitable for the people who took them out.
Complaints
During April, May and June, there was some 56,869 complaints made about PPI according to the FOS. 70% of the rejections from the banks that get to the FOs are upheld and the average pay-out for the consumer is £2,500.
According to the Financial Conduct Authority’s website, there has been just over £15 billion paid out over PPI since January 2011.
PPI Complaints Made
October 13, 2015 Daniel Lee RBS, HSBC, Barclays and Lloyds could be forced to break up after a finance watchdog’s inquiry. The watchdog has made claims that Britain’s banking sector is characterised by anti-competitiveness and a failure to meet ordinary citizens and small business’ needs.
The newly established Competition and Markets Authority (CMA) has out done their predecessors who were willing to launch an enquiry of this nature until 2015.
The ‘big four’ banks in Britain; Lloyds Banking Group (which includes the likes of Halifax, Bank of Scotland and Blackhorse to name a few), Royal Bank of Scotland (along with Natwest), HSBC and Barclays are the ones that dominate the UK’s yearly £10bn, banking sector. All four of the banks have been shrouded in scandals such as the mis-selling of PPI, and various other dramas in the past few years yet between them, they control 77% of the UK citizen’s current accounts, 85% of UK small business’ current accounts, and a rather overwhelming 90% of UK business loans.
Two different CMA studies which were published on Friday 18th July, concluded that core elements of the UK’s retail banking sector have a significant lack of “effective competition” and ultimately, they fail to meet the needs of personal consumers or small to medium-sized enterprises (SMEs).
This research from the CMA has revealed that while public satisfaction with these dominant banks falls shy of 60% and their market shares have remained fairly resolute. The studies concluded have concluded that smaller banks with higher satisfaction ratings were simply unable to compete or acquire a sizeable share of the market.
Speaking about their studies, Alex Chisholm, the CMA’s chief executive has said: “Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy. However, our studies have found that despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks,”
The plans for the CMA to launch the enquiry have come about at a time when the UK’s banking sector is coming under increased scrutiny from within the political ranks in Britain. Ed Miliband, leader of the Labour party has vowed to back a competition investigation if he is elected in next May’s general election and shadow Chancellor, Ed Balls has also come out and emphasized the need for widespread reform.
Speaking on the need for reform, Ed Balls said: “As we said earlier this year, in the next parliament we need to see at least two new challenger banks and a market-share test to ensure the market stays competitive for the long term.”
According to the British Bankers’ Association (BBA) there are currently a number of substantial changes underway in Britain’s banking sector at the minute. The association has recently published a range of proposals it claims would encourage and facilitate the growth of new and emerging UK banks. The BBA had hoped that the regulators and politicians would have been amenable to their suggestions but the CMA has elected to carry on with and pursue a full-scale inquiry.
Theoretically, such an inquiry could result in a full-scale break up of Britain’s largest banks but reform to this extent is rare. Following on from the enquiry, the CMA will more than likely demand banks cultivate new networks of branches and become much more transparent with respect to their charges.
Move Your Money (MYM) an ethical banking group have welcome the CMA’s planned investigation. Charlotte Webster, campaign manager for MYM had this to say: “We’ve been saying this for years. People want real alternatives. This is something the big banks would have you believe don’t exist, but they do.”
Millions of people in the UK changed banks last year, but a concrete shift from a monopolised banking sector to one that is characterised by diversity and ethics is something that is yet to be realised.
The CMA’s investigation is the 10th analysis of the market since Don Cruickshank was commissioned to examine the industry, by then Prime Minister, Tony Blair in 1999. Former investment banking correspondent at the Financial Times, Chris Hughes has suggested that the UK banks “have much to fear” from the probe that is looming large, however the independence, comprehensiveness and efficacy of this planned enquiry remains to be seen.
Your Money Claim
