PPI Claims on Hold as legal action taken against FSA

[kennythecelt]

Well Heatman, its certainly begining to look that way, unfortunately. We all know what happened with bank charges and the cynic in me is alive and well.

 

However, we don't have all the pieces of the jigsaw yet and there's quite a bit of information needed.

[Heatman]

scammed and will all the consumer sites shut up again?

 

do nothing?

 

seems that way, i wonder who funds them???

[kennythecelt]

I can well understand your anger Heatman but I feel it is ill judged and misdirected.

 

This site, in particular, along with MSE and other sites have been at the forefront of many fights championing the consumer. There are lots of folk who give up their time freely on this site and have done so since 2006. You join in October 2010 and make such suggestions, please give me a break.

 

We are perfectly willing to offer you support and advice on PPI or other issues. Thats why most of us are here, because we believe in righting wrong.

 

Please remember that this has just happened and it will take time to develop tactics that are in the best interests of claimants. Maybe you have a positive and worthwhile suggestion to make, if so, please let us know.

[kennythecelt]

News item from the Scotsman

 

http://business.scotsman.com/business/Bankers39-appeal-delays-payouts-.6580365.jp

 

Bankers' appeal delays payouts

 

Published Date: 14 October 2010

By JEFF SALWAY

Thousands of consumers waiting for compensation over the mis-selling of payment protection insurance face long delays because of the British Bankers' Association's challenge against new complaint-handling rules.

 

The BBA has requested a judicial review of Financial Services Authority (FSA) rules coming into force in December requiring banks to reassess previously rejected PPI complaints dating back to 2005. The case is unlikely to begin before April and could last for several months.

 

Complaints unaffected by the judicial review will still be processed, according to the BBA, led by chief executive Angela Knight. But hundreds of thousands of claims will be effectively put on ice until it is over.

 

The BBA said that where this is the case, customers will be contacted by their bank.

 

It added: "Customers should be assured that all complaints will be reviewed - even those delayed by this judicial review process.

 

"There is no deadline for receipt of complaints. If customers have a problem regarding PPI they should contact their bank and, if necessary, complain in the normal way."

 

Its line was backed by high street banks including Royal Bank of Scotland, HSBC and Barclays.

 

Lloyds Banking Group previously said it would not consider any PPI claims until the judicial review was complete.

 

However, Lloyds told The Scotsman that while there may be a delay if clarity was needed from the FSA or the Financial Ombudsman Service because the judicial review may impact on the complaint, claims not affected by the review would be resolved.

[kennythecelt]

Competition Commission confirms ban on point of sale PPI. Some good news.

 

http://www.competition-commission.org.uk/press_rel/2010/oct/pdf/ppi_remittal_press_release.pdf

 

The Competition Commission (CC) has confirmed that it will introduce a remedies package based around a point-of-sale prohibition for all forms of payment protection insurance (PPI) (with the exception of retail PPI1May) after detailing how it will benefit customers. This follows the CC’s provisional decision on this issue, which was published in this year.

The point-of-sale prohibition would stop the completion of sales of PPI during the sale of the associated credit product such as a personal loan. It was one of a package of measures the CC planned to introduce following its investigation into PPI, which concluded that businesses that offer PPI alongside credit face little or no competition when selling PPI to their credit customers.

The report and in particular the proposed point-of-sale prohibition were the subject of a legal challenge last year to the Competition Appeal Tribunal (CAT) by Barclays, supported by Lloyds Banking Group and Shop Direct Group Financial Services Ltd. Whilst upholding the CC’s conclusions as to the competition problems in this market, the CAT ruled that it must in particular consider further the role and importance of a potential drawback to the prohibition, namely that it might inconvenience customers.

[kennythecelt]

Payment protection insurance sale curbs approved

 

http://www.bbc.co.uk/news/business-11537187

 

Banks will no longer be able to sell payment protection insurance policies when granting loans to customers, the Competition Commission has confirmed.

 

This "point of sale" ban was first proposed last year after a long investigation, but was held up by a challenge by Barclays bank.

 

PPI is supposed to cover borrowers' loan repayments if they fall ill, die, or lose their jobs.

 

Lenders will have to wait seven days before offering PPI to their customers.

[Radwan]

I used to work in a call centre, when I first heard about ppi.I borrowed some money and started to help people. I don't know what to do. I can't lie to my clients so I have made them aware of what is going. Should I carry on proccesing claims or shall just go back to work.

[kennythecelt]

Hello Radwan

 

Could you expand a bit more on your above post please, if you don't mind. I am unsure of the point you are trying to make.

 

Thanks

[kennythecelt]

From the Telegraph (extracts only- read the full article) http://www.telegraph.co.uk/finance/personalfinance/insurance/8067126/PPI-delays-after-banks-dig-heels-on-complaints.html

 

The BBA did not say which type of PPI complaints would be deemed "directly affected" and which would be unaffected by this legal action. Nor would it quantify what proportion of complaints now faced delays to get their claim settled. Customers should be told when they register a complaint whether they are affected though, a BBA spokesman said.

 

The dispute centres on new FSA rules, due to come into effect on December 1, stating banks must review PPI complaints against new sales standards, designed to root out highly pressurised selling tactics.

 

Daniella Lipszyc, a solicitor and director of Ultimate Law, added: "It's outrageous that the banks are putting customer complaints about PPI on hold. Hundreds of thousands of people are going to be affected by this decision, given that approximately 50,000 claims are handled by the industry each month. Yet again the action of the banks is having a damaging and detrimental effect on the consumer. These are the usual tactics of the lenders, who show that they can do what they like and nobody is able to put a stop to their antics – not even their own regulator.''

So what should consumers do? Those who feel they have been mis-sold a PPI policy should ensure they still lodge a complaint with their banks, or the lender that sold them the policy. Lenders are obliged to process all claims and will tell the customer if the complaint is put on hold. If it is not delayed, then the lender is required, under the FSA rules, to process your complaint as normal.

However, if you do receive a letter saying the claim is on hold because of the judicial review, the FSA has said there is nothing to stop you taking the complaint to the ombudsman, who will still consider your case and look at the evidence to rule whether or not your policy was mis-sold.

According to recent statistics from the ombudsman relating to PPI complaints, it finds for the consumer in more than eight in 10 cases. This is far higher than its average "uphold rate".

A spokesman for the Ombudsman said: "Customers have to complaint to the provider that sold them the PPI policy first. If after eight weeks they are unsatisfied with their response given then they are free to refer the complaint up to us. We are still looking at all PPI complaints were receive."

 

It is also unclear whether the FSA will take further action against the banks over their decision to put some complaints on hold. Recently it accused the banks of abusing the complaints procedures by stalling legitimate complaints, knowing that many customers would not pursue them further.

Consumer groups urged those people mis-sold PPI to be persistent. Ms Lipszyc said: "The FSA is facing a revolt from those it regulates and it is understood that the regulator is considering strong action." She said she understood the FSA was considering whether to file an injunction against the banks.

Edited October 16, 2010 by kennythecelt

[dx100uk]

so they should

a blanket stop is just an excuse

 

dx

[Heatman]

why are martin lewis and co off other consumer websites, urging people to fire in claims quickly before the banks win this case?

 

i read it like you, but with the impending double dip recession, maybe the banks can no longer afford to pay the ppi out and need a 2 or 3 year block with appeals etc

 

will be interesting to see what if anything the FSA do, if the banks get claims on hold... it will be for years.

[dx100uk]

why are martin lewis and co off other consumer websites, urging people to fire in claims quickly before the banks win this case?

 

i read it like you, but with the impending double dip recession, maybe the banks can no longer afford to pay the ppi out and need a 2 or 3 year block with appeals etc

 

will be interesting to see what if anything the FSA do, if the banks get claims on hold... it will be for years.

 

we are doing the same, but i don't think it's really necessary , but it won't hurt to be in the queue.

 

dx

[cdhhyper]

the FSA has a track record of judging past sales against current criteria, to whit, pension transfers and endowment sales.

 

 

i do not doubt that some endowment sales were inappropriate, but not as many surely as was made out, because a lot of people just wanted the compensation.

 

I do not doubt that some pension transfers were inappropriate, but many stood up to the criteria in force at the time the transfer was made, they just didn't pass the new criteria they were judged against. Many advisers were ethical, honest etc, but funnily, the ones driven to inappropriate sales were the bank advisers - commission hunting!

 

However, the insurance companies just rolled over, why I don't know.

 

The FSA decided to try the same thing with banks, and then found out that the banks are not so accomodating, that they do indeed have teeth.

 

And while, I am sure, many of the MPPI products were sold inappropraitely, especially the 5 year ones, these produced big commissions for the banks and lenders, and they do not want to repay any.

 

I think the true number of correctly sold MPPI plans is probably small, but they were all sold under the guidelines of the time, which were not robust enough, and slowly got changed.

 

But judging anything from the past against current guidelines/laws is flawed.

 

Imagine that, (as an overt example) that driving while drunk now carried a mandatory long time in jail and that the permitted alcohol level in the blood is now one tenth of what it was; then review all past cases, conviicted or not, test against the new law, and find them guilty etc. even if in the past they were not.

 

You wouldn't like that would you.

 

Nor do the banks.

[dx100uk]

no comparison at all.

 

they fleeced £1M's out of people because 'they could'

 

PAY BACK TIME

 

DX

[paulDW]

Solicitors will still litigate against the lenders, the freeze will not have any effect on litigation.

[vjohn82]

I've got one in with HFC right now... I was paid out last month for my Barclaycard and HSBC ones.

 

Looks like they are trying to stem the tide again... time for a taxpayers revolt in this country if you ask me.

[patfla]

yes,I do believe people power should be an option here as the big banks are once again trying to shaft the consumer.If enough "on Hold"letters are forwarded to the ombudsman for investigation then perhaps

there may be positive results.

I wonder what there reaction would be if I decided to put my repayments on hold awaiting the outcome

of their issue with Fos?

[Michael Browne]

Here is the BBA application for the Judicial Review

 

Beware it is 90 pages long:

 

BBAJRApplication.pdf

[MARTIN3030]

scammed and will all the consumer sites shut up again?

 

do nothing?

 

seems that way, i wonder who funds them???

 

Suppose much of the blame should be focussed on Ambulance chasers who set up shop to make a kill with PPI in the same way they did with bank reclaims and promises of CC debt wipeout.