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    Banks buckle under PPI claims.....

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    papa_umau
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    Banks buckle under PPI claims.....

    Post by papa_umau on Fri 29 Jul 2011, 12:46 pm

    Here is an article that I had forwarded to me from the Consumer Action Group or - ( CAG )

    Banks buckle under deluge of loan insurance complaints

    Big banks are being flooded with thousands of customer complaints about payment protection insurance and are managing to settle only very few cases, according to industry sources.

    One large bank is understood to have received almost 7,000 complaints in a single week recently, and had settled fewer than ten cases. Industry insiders said that the banks were struggling to increase workforces and other resources, such as IT systems. Nonetheless, banks are doubling or tripling their complaints-handling staff in Britain, increasing the total employed across the industry by thousands in an attempt to meet the flood of complaints.

    One insider said that the level of claims coming through the door was “an enormous challenge”, adding that one big problem was that banks were trying to employ significant numbers of staff from the same relatively limited talent pool.

    An option being considered by some banks is to sign outsourcing contracts with Indian companies to keep costs under control and to deal with the level of complaints. Such a move might be considered controversial because some decisions about PPI mis-selling are complex and may not be resolved easily by external contractors.

    There is a possibility, too, that customers, who already believe that they have been mis-sold a product, find themselves caught up in a frustrating process to try to resolve the issue, financial insiders warned.

    With a final compensation bill expected to be up to £8 billion, PPI is the biggest mis-selling scandal to have hit the banking industry. PPI was insurance intended to pay loan bills in the event of the policyholder losing earnings through ill-health or redundancy, but many people were unaware that they were paying for it or were sold policies when the fine print excluded them from ever claiming.

    Late last year the Financial Services Authority ordered banks to apply new rules to how they sell products, requiring them not only to supply customers with documents stating the terms and conditions but also to talk them through the details.

    The change, which applied to old and new policies, led to panic among the banks as it left them open to millions of mis-selling claims over PPI, triggering protracted legal action.

    The banks abandoned their case only when Lloyds, the biggest PPI seller, broke ranks in May and walked away from the case, earmarking £3.2 billion to pay victims.

    Because banks froze all work on compensation claims during the legal case, since May they have been swamped with historic and new claims.

    The logjam makes the situation different from previous mis-selling problems, when banks have been able to increase their staff over time, industry sources said.

    The FSA has already waived the normal rule stipulating a response to complaints within eight weeks, giving banks more breathing space to deal with PPI claims.

    A rolling programme of deadlines has been introduced, with the first date of August 31 looming for decisions on complaints put on hold while banks pursued their court case.

    The industry believes it will take about two years to clear the complaints.




    Hell mend em, I say !

    What say you ?



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    Angie baby
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    Re: Banks buckle under PPI claims.....

    Post by Angie baby on Sat 30 Jul 2011, 12:20 pm

    I find this situation both rewarding and satisfying when these monsters are made to pay back what they take from us using sharp if not crooked practices.

    They have had far too much freedom in the past and now it seems that their misdeeds are comimg back to haunt them.

    "Long may it continue" - I say.
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    papa_umau
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    Re: Banks buckle under PPI claims.....

    Post by papa_umau on Sun 31 Jul 2011, 12:59 pm

    Got to be with you all that way on that one Angie !

    It does seem as if the government watchdogs are starting to do the job they were created to do and as far as the banks are concerned they are now getting assaulted from all sides.

    It is about time that the financial and consumer watchdogs showed their teeth instead of just continually letting these beasts continue to get away with murder.

    What I would like to see now is the Competition Commission REALLY turning the screw where big companies either price-match or in fact start to build illegal cartels. They could start with the national energy companies and move on to the national banking systems where the unfair trading practices and the disgusting bonuses they do little to earn are curtailed to suit the measures the rest of have to suffer under in these days of austerity.


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    Re: Banks buckle under PPI claims.....

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