After it was found to have breached Competition and Markets Authority (CMA) requirements regarding payment protection insurance (PPI) statements, Barclays Bank has been forced to offer refunds to around 10,000 customers.
After the intervention of the CMA in 2011, via a Market Intervention Order, firms are now required to send annual statements to all PPI customers setting out both the cost of the insurance and details of the cancellation rights that apply. Sending statements in this way should ensure customers who hold PPI are aware of the fact – many a mis-selling claim has been brought by a customer who alleges they were sold PPI without their knowledge or consent.
Now it has been revealed that many Barclays customers have not received these statements.
The value of the refund – which will only be available to customers who decide to cancel their policy – will be the amount paid in premiums since the date of the first missing statement, plus interest at 8%. 9,404 credit card PPI customers and 740 mortgage PPI policyholders are affected – around 3% of the bank’s total number of PPI customers.
Barclays has already written to affected customers. The CMA has now written to the bank stressing that it expects them to comply with the requirement to send statements in the future. Its letter describes the failings as “serious breaches of Article 4 of the Order which could potentially harm customers’ interests,” but also acknowledges that “Barclays has agreed to take the necessary action to ensure that in future it complies fully with the Order.”
Adam Land, the CMA’s senior director of remedies, said:
“The annual statement was an important measure resulting from the market investigation which ensures customers know they have a PPI policy, how much they are spending on it and reminds them of their right to cancel or switch.
“Barclays has now taken the necessary steps to alert and recompense affected customers, as well as to ensure that there is no repeat in future. We trust that the extra reporting requirements we’ve put in place will confirm this.”
A Barclays spokesman said:
“Last year we identified a number of Barclays and Barclaycard customers who, due to a technical issue, had not been sent their annual PPI statements.
“We have written to those customers to apologise and outline how we will remediate them where they believe they would have cancelled their policy, had they received the statements.
“We apologise unreservedly to those customers affected and have put in place a number of controls to prevent this from happening again.”
It is reported that, as of April 29, around 100 customers have taken up the option of a refund.
The CMA’s predecessor, the Competition Commission, intervened in the PPI market in 2011, after it became concerned about the lack of shopping around conducted by PPI purchasers, and the barriers to switching provider that existed. This lack of competition was said to give the loan provider an unfair advantage when offering PPI on the loan.
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