16th September 2013
The individual amounts that the top five banks have set aside to cover claims are staggering. Santander reckons its compensation bill will top £550million, HSBC expects to pay out just over £1 billion, RBS thinks it needs £1.3 billion to cover the cost of claims, Barclays reckons it will pay out £2 billion, while Lloyds has set aside a total sum of £4.3 billion.
Although these banks have committed to using all of this money for repayments, in reality getting your money back can be remarkably difficult.
Nahida Goodchild from Ipswich was unaware that Barclays had sold her PPI when she took out a credit card with them in 1990. Barclays added PPI premiums onto her Barclaycard without any discussion with her, so for more than 20 years Nahida had been paying for a policy she didn’t know she had, and may never have needed.
Convinced she had a strong case for a refund, Nahida contacted Barclays who sent her a letter rejecting her claim implying that she had actually agreed to sign up to a PPI policy. Unfortunately for Nahida it came down to her word against Barclays.
The Financial Ombudsman Service (FOS) is an independent body with the power to overturn banks’ decisions and, if necessary award compensation. It was set up to adjudicate in all kinds of disputes. However since the banks were supposed to be compensating PPI customers, it’s been creaking under the workload.
Chief Financial Ombudsman and Chief Executive of the Service Natalie Ceeney explains,
“It’s now hit unprecedented volumes. In fact last week we received our half a millionth complaint about the subject, and now every working day we’re getting around 4,000 phone calls about PPI mis-selling and taking in a thousand or more new complaints to investigate.”
“There are millions of people out there who’ve been denied justice for a very long time. And for the Ombudsman Service we are dealing with one of the biggest clean ups in financial services history.”
According to Natalie Ceeney of the FOS the worst banks for refusing to pay out are Lloyds and Barclays. In the first six months of the year, the Ombudsman received 9,500 complaints about Lloyds – 98% of those were upheld, meaning Lloyds had to pay out.
In the same period there were a staggering 19,500 complaints about mis-selling by Barclays and of those 93% were upheld.
The Ombudsman Service has legally binding powers, so what they decide, the banks have to do.
If you think you may have been mis-sold PPI, contact us by visiting our client area and sign up today or phoning us on 08455 61 61 61 and we can work on your behalf to get what may be rightly owed to you.
Posted in PPI, UK Banks, Financial Ombudsman Service, Claims