UK Regulator’s Additional Powers Make It Unlikely To Have New Financial Scandal In The Future

December 6, 2017
by admin in PPI News

Payment protection insurance mis-selling was the UK’s biggest financial scandal in history. It had inflicted almost £40 billion in losses for banks because they had to refund consumers for the mis-sold products. Bank employees employed their unscrupulous tactics before the 2008 financial scandal. Thereafter, stricter banking regulation and the use of collective data had been the FCA’s agenda in building its organisation and providing new regulation powers.

The FCA blames the poor structure of the employee incentives system. Because employees face pressure to increase their sales to meet quotas and earn incentives, they have mis-sold products in the process. Even banks did not benefit from such a troublesome event because they had to refund consumers in the process.

Banks are likely to play fair with consumers when it comes to product and service provisions. Despite the increased support for customer service due to the FOS’ efficiency during the entire ordeal, banks will invest in properly structuring its different frameworks to avoid repeating a PPI scenario.

The Financial Conduct Authority will have powerful intervention measures by identifying signals that represent possible immense financial scandals in the future in frameworks. Using big data collected from before, during, and after the PPI scandal, the regulator can foresee possible loopholes and effectively shut down the banks’ frameworks quickly.

The UK Has Learned Much From The PPI Scandal

November 28, 2017
by admin in PPI News

The UK’s biggest financial scandal also offers its biggest lesson. It was during the height of the PPI crisis that banks learned many lessons the hard way. Aside from financial institutions, legislative and regulating bodies learned their respective lessons as well. The Financial Conduct Authority surpassed the powers of its predecessor, the FSA, to improve its overview of bank activities and structures.

Abusive banking practices are now met with harsh penalties. However, the “scare” method is not enough to force banks to improve their sales methods and services. The FCA now has power to look into bank systems, especially incentives structures, which help them foresee possible PPI-scale scandals in the near future.

The PPI scandal has indirectly contributed a positive development to Europe’s Insurance Distribution Directive. By enforcing the regulation and laws used in the United Kingdom, the EU ensured banks had no overdrive when it comes to unscrupulous banking tactics.

The Financial Ombudsman Service also proved to all businesses that resolution through mediation is important. Financial sector confidence still remained with the FOS’ efficient resolution of improperly-rejected PPI complaints. However, it had to scale up its operations to meet the increased demand of consumers. In 2012, during the peak of the scandal, the FOS handled up to 5,000 complaints on a weekly basis.

You Can Still Claim Refunds After The PPI Deadline in Three Ways

November 23, 2017
by admin in PPI News

The Financial Conduct Authority made its final decision for the deadline on PPI claims. By August 29, 2019, consumers cannot make a claim. However, the media has portrayed this erroneously. Reviewing the legislative rights of consumers, any UK client can make a complaint about a financial product and receive the proper redress at any time.

If anything, it is the government support that will disappear. Consumers will be left to fend for themselves after the deadline. If you wish to make a PPI claim, then you just need to do these three.

Legal Notice

Claims management company representatives are not solicitors. Therefore, you cannot ask help from any CMC after the claims deadline. However, solicitors tied with these companies can help you. Consult with them and assess whether it is within your right to file a complaint. It can be lengthier than a typical PPI claim process, but you will get your refunds in full, too.

The Financial Ombudsman Service

The FOS is responsible for mediating issues between consumers and companies. In essence, they must be willing to resolve all financial product issues even after the claims deadline. In any case, they will remain the only avenue for non-legal resolution between banks and consumers.

The Bank Itself

By law, banks must resolve all consumer complaints in full. This means as a client, you have the right to complain about any of their products or services. After the deadline, you can still file a complaint. However, there are no guarantees regarding the resolution of your complaint. Without government guidance, it may take longer to process your PPI complaints.

PPI Complaints Have Increased Before FCA’s Deadline Announcement

November 14, 2017
by admin in PPI News

The Financial Conduct Authority’s March announcement of the PPI claims deadline and its subsequent advertising campaign gave only partial motivation to consumers. According to analysts, PPI figures have already increased by 14% from January to February. Many consumers and claims management companies viewed the FCA will not play neutral regarding the mis-sold insurance scandal.

The City watchdog’s announcement of the deadline came with an explanation. It believes UK’s consumers will be better motivated to make a claim with the presence of finality in the issue. The FCA set the PPI claims deadline on August 29, 2019.  It came as a relief to banking institutions. However, the watchdog made it clear that banks have to step up their efforts in resolving the insurance scandal.

CMCs and consumer groups highlight the inefficacy of financial institutions to provide a simpler complaints solution. The process remained lengthy and continued to reject legitimate consumer claims. The FCA said it would fine any financial institution evaluating legitimate complaints with unfair methods.

Meanwhile, UK’s biggest banks claim they are “finished” funding their respective complaint funds. However, they received enormous complaint figures this year. Lloyds received an estimated 600,576 complaints. Barclays received 446,978 complaints in the first half of 2017. RBS received 278,594 in the same timeframe.

Clydesdale and Yorkshire Banks Set Aside £403 Million for PPI Refunds

November 7, 2017
by admin in PPI News

The Clydesdale and Yorkshire Banking Group (CYBG) had set aside £403 million to provide refunds to consumers mis-sold payment protection insurance from the 90s to the early millennium. The National Australia Bank is now facing £671 million earmarked for the financial scandal. CYBG will only shoulder 9.7 per cent of the allocation mentioned.

No other bank aside from CYBG declared additional funding for their compensation package. According to Lloyds, Barclays, and RBS, they are “finished” in providing funds. However, RBS is still facing massive fines from US regulators and its Department of Justice pertaining to its toxic mortgages sold in 2008 before the financial crisis.

The CYBG group attributes the growth of their insurance scandal refund package due to the increased awareness caused by claims management company campaigns and the FCA’s ad campaign.

The city watchdog reports that PPI complaints have increased during the first six months of 2017 by 24% compared to the previous year. Figures show it has reached 1.1 million compared to reaching an approximate 900,000 complaints in the previous year.

The FCA also promised that in line with its PPI ad campaign, it would regulate banks’ efforts to simplify its claims process to the benefit of consumers.

 

Barclays and Lloyds: ‘We Have Enough Provisions for PPI’

November 1, 2017
by admin in PPI News

Two of the UK’s biggest banks announced that they have set aside enough provisions to resolve their PPI refunds by August 29, 2019. Barclays, Lloyds, and RBS said they have turned a profit after revealing their third quarter performance results to the public.

According to the RBS, who was riddled with other violations pre-financial crisis, it had good figures for refunds and profits by the end of October 2017. However, it has to address a US Department of Justice fine for its toxic mortgages that were sold in 2008.

Meanwhile, Lloyds had set aside enough and has a backup fund to address possible fluctuations in refunds for the coming year. Barclays also said it had set aside enough money to address any legitimate complaint for payment protection insurance.

In September, the Financial Conduct Authority said it would be stern with banks as they develop simplified ways to file complaints and reclaim refunds. It said it was the responsibility of the financial sector to ensure all consumers receive their rightful refunds if they make a claim.

The watchdog also said its decision for the PPI claims deadline is final. It intends to have all mis-sold customers to come forward through a public advisory in the form of an advertisement, which has aired lately with the animatronic figure of Arnold Scwharzenegger and his voice urging consumers to make a decision.

PPI Figures Have Increased by 24% Compared to 2016

October 26, 2017
by admin in PPI News

According to the Financial Conduct Authority, the number of PPI complaints it had received from January to June of 2017 had increased by 24% compared to the same time frame in 2016. The watchdog attributes the increase to its March announcement of the PPI claims deadline on August 29, 2017. The watchdog believes the numbers will continue to grow in the following years provided its ongoing advertising campaign is urging consumers to make their own claims as soon as possible.

According to FCA Chief Executive Andrew Bailey, UK consumers lack an incentive to make a claim due to the lack of a PPI claim deadline. Its advertising campaign, while awkward and a bit strange, is effective in raising awareness about payment protection insurance. However, it still lacks technical explanations about how to make a PPI claim and how to receive compensation.

Consumer groups had been against the deadline given the elderly and non-tech savvy individuals are left out of the advertising campaign’s loop. They also noted the banks’ lack of simplification towards improving the procedures to claim refunds and continuing rejections of legitimate complaints.

The UK’s finance sector has set aside a total of £40 billion for mis-sold PPI, making it the most expensive financial scandal in the UK.

Three Financial Products Considered as Payment Protection Insurance

October 18, 2017
by admin in PPI News

If you never thought that you were sold PPI because the bank employee or financial adviser sold you a different insurance policy, beware that it could be wrongly sold as well. Payment protection insurance is not the actual financial product name, but rather a description of the item’s function for your financing. Here are three names it is commonly known.

Mortgage Protection Policy

Mortgages are paid yearly inclusive of interest, which makes it imperative that lenders require a protection plan in case the borrower gets sick or encounters a situation that they cannot provide payments. A mortgage protection policy helps provide a year’s worth of repayments, but only if the insurance holder is eligible.

Credit Card Payment Guarantee

Similar to mortgage protection policies, credit card payment guarantees and insurance repay a year’s worth of credit card repayments. Lenders will require this from high-risk borrowers, but they cannot ask them to purchase a specific brand because all financial products have different terms and conditions.

ASU Payment Plan

Accident, sickness, and unemployment payment plans (ASU) allow borrowers to pay one year of repayments for their financing. However, once again, banks and financial institutions cannot ask applicants to purchase a specific ASU brand because each policy’s provisions differ from one another.

Three Ways Bank Employees Have Mis- Sold PPI (Recap)

October 12, 2017
by admin in PPI News

The Financial Conduct Authority (FCA) has made it clear that beyond August 29, 2019, no complaint about payment protection insurance will be addressed by the watchdog or any financial institution. The deadline was set in place to encourage consumers to act upon their refunds immediately. If you’re not keen on how your bank employee might have mis-sold your insurance policy, here are a few ways how.

Requirement

Bank employees and even financial advisers may have told you that the insurance policy was a requirement to go with the loan. However, they must tell you that you can opt for other policies, and you can pull away from purchasing the product they present you because you are ineligible for it. Consider a policy you purchased at face value mis-sold.

Added Inconspicuously

Some banks approve loans for junk credit and retired applicants but add an inconspicuous payment protection insurance without informing the customer. If you had found a miscellaneous item in your series of billing statements, you are possibly mis-sold PPI.

It Raised Credit Scores Quickly

Financial insurance products only guarantee payments for a time period in case something happens to the individual. However, every insurance policy has different criteria. Even if an applicant includes it with their financing, it will not increase their credit scores immensely.

Three Ways to Know If You Have a ‘Plevin PPI’ Due for Refund

October 3, 2017
by admin in PPI News

Hundreds of thousands of PPI complaints were reopened after Susan Plevin won her case against Paragon Personal Finance, establishing the clause that all products sold by a financial advisor or bank employee who had received more than half its price is invalid and due for refund. Here are three things to know if you believe you have a “Plevin PPI.”

A Very High Commission

As mentioned earlier, if the bank employee received substantial commission from selling you the insurance policy, you are due a refund from the insurance policy. Make a claim against your bank and have an independent body investigate your complaint to verify whether your insurance seller received a very high amount after selling the insurance to you.

No Double-Dipping

If you had already claimed your PPI refunds successfully, you cannot make another complaint because of Plevin’s clause. It is fair that you had received substantial compensation, and you will not be refunded anything else other than the original price and repayments you had made for the policy.

You Can Still Work With the Financial Ombudsman

The Financial Ombudsman is also informed of these events and will still investigate on behalf of customers free. However, the Ombudsman’s decision is final and if your policy’s circumstances are not compatible with Plevin, it is likely your insurance was mis-sold in another way or not at all.