As the payment protection insurance (PPI) deadline draws near, a number of banks and building societies have agreed to sign up to a new scheme that ensures more people will be able to have their claims investigated.
Normally consumers have to actively make a complaint to an authorised firm. Many consumers would first contact their bank and check whether they ever had PPI, and if they wanted to make a complaint, they would then need to contact the bank once again and express their dissatisfaction with the sale.
However, under this new scheme, whenever a customer contacts the bank and finds out that they did indeed have PPI, the bank will automatically commence an investigation into whether it was appropriate to sell the PPI, so essentially they will carry out the same steps as they would have if a complaint had been made about that policy. Customers may still be asked by the firm to provide additional information during the course of the investigation.
The Financial Conduct Authority (FCA) says ‘most’ banks have signed up to this voluntary scheme but has not disclosed the names of the firms who are on board. However, media reports say all four of the biggest UK banking groups have signed up: Barclays, HSBC, Lloyds Banking Group (which includes Bank of Scotland, Halifax, Lloyds and MBNA) and Royal Bank of Scotland (which includes NatWest). Nationwide Building Society, the largest UK building society, is also reported to have signed up.
The amounts set aside by the largest PPI providers in order to compensate customers reached eye-watering levels some years ago, but the banks are now warning they may need to increase their compensation reserve further, after experiencing a surge of new claims. An unnamed bank executive has been quoted in the media as saying:
“As we get towards the end there has been an absolute surge in information requests; it’s gone nuclear in the second quarter of the year.”
Many banks are still recruiting for staff to handle their PPI complaints workload.
A survey by consumer organisation Which? has revealed that 86% of consumers were not aware that the bank or other firm would still be required to investigate a PPI sale even if the customer did not fully complete the firms’ lengthy complaint forms. Only 17% said they were aware that PPI claims were taxed and that some people would be able to claim back this tax.
Eleanor Snow, Which? Consumer Rights Editor said:
“The deadline for claims is rapidly approaching but our research shows that there is still a lot of confusion about the process that might be putting people off.
“Even if you have previously had a claim declined it’s still worth asking your bank to check all of your products as you may still be owed compensation.”
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