23Oct

One of the ‘Big Four’ UK banking groups has admitted that “tens of thousands” of customers, comprising 0.6% of the bank’s payment protection insurance (PPI) policyholders, were incorrectly told they had never had PPI with the bank. The number of affected customers also comprises 1.1% of those who have complained to the bank about PPI via a CMC.

The bank developed a checking tool back in 2012 that claims management companies (CMCs) could use to make bulk requests regarding whether up to 50 of the CMC’s customers had taken out PPI policies. However, a system error meant that these requests were not being checked against all of the bank’s internal records.

The issue was compounded by the fact that all of the major banks sold PPI to large numbers of customers without their knowledge, meaning that millions of consumers have been forced to check whether they ever had the insurance.

A spokesman for the bank said:

“99.4 per cent of [name of bank] customers making a PPI enquiry have received the correct decision.”

“We identified through our own review that a very small percentage of customers were given the wrong information when they contacted [name of bank] via a claims management company to find out whether they had ever held a PPI policy on their account.

“Customers do not need to take any action.

“We are proactively contacting everyone who has been impacted and we will be registering a new complaint on their behalf to put things right as soon as possible.”

Stephen Pearce from Powys told the BBC that he was initially told by the bank in a telephone call that he had never had PPI. Mr Pearce then used the services of a CMC, who duly made a bulk request through the bank’s faulty system. After this second request he was again told he had never had PPI. Only after his CMC complained, the bank finally confirmed in writing that he had indeed had PPI on a credit card. The bank then admitted mis-selling the insurance and paid Mr Pearce £3,991.52 in compensation.

The £40 billion PPI mis-selling scandal is now entering its final phase. Apart from a few very limited exceptions – such as PPI sold after the deadline, or complaints about claims handling and administration – it will not be possible to make a PPI complaint after August 29 2019.

Complaint volumes have been increasing slowly and steadily in recent months as the deadline approaches, and the Financial Conduct Authority has re-started its Arnold Schwarzenegger-fronted advertising campaign, which is designed to make sure that every potential remaining PPI claimant submits their complaint prior to the deadline.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article