Banks challenge new PPI rules

[di30]

Re: Banks challenge new PPI rules

Interesting, will look out for this tomorrow then, cheers.

[di30]

Re: Banks challenge new PPI rules

Did also post on another thread too lol.....


http://www.fsa.gov.uk/Pages/consumer...es/index.shtml


PPI changes challenged: Can you still complain?





If you have insurance to cover your loan or debt repayments in the event of accident, sickness, reduced income or loss of employment, you can still complain about how the policy was sold to you or the response you received after making a claim. Find out how.

If you have taken out a loan, mortgage or credit card, you may have been sold payment protection insurance (PPI) to cover the repayments if you are unable to meet them in certain circumstances.
These policies can also be called loan protection, credit protection, or accident, sickness and unemployment insurance.
It may have been suggested to you that you needed PPI to be approved for a loan or credit, or even had a policy added to the amount of your loan without your knowledge, increasing the balance you have to repay.
Consumer protection challenged

We took over the regulation of insurance sales in 2005, and since then have found evidence of widespread problems with the sale of PPI and how complaints are handled.
To ensure customers are treated more fairly when complaining about the sale of a PPI policy or after making a claim, we announced a package of measures for firms to follow by 1 December 2010.
These measures include:

• ensuring firms handle complaints properly and offer redress where appropriate;
• explaining when and why firms should review past complaints to identify if there are serious flaws in sales practices that may have affected customers who bought PPI; and
• setting out common sales failings to help firms identify bad practice.

What’s happened now

The banking industry, through trade association the British Bankers' Association (BBA), started legal proceedings on 8 October 2010 to challenge our ability to insist on these measures.
We intend to contest this challenge as we consider the measures to be a fair solution for consumers and the industry.
What to do if you have a complaint

Despite the challenge by the BBA, you still have the right to complain about your PPI policy.
If you have a complaint about the circumstances of the sale of your PPI policy or the suitability of the product for you, you should first complain to the firm that sold it to you.
If your complaint is about a claim you have made, you should raise the matter with the insurance firm.
You are more likely to get a prompt response if you follow the firm’s complaints procedure – you can check online or call to confirm how they prefer you to proceed.
The firm then has eight weeks to look into your complaint and provide a response.

If you are not happy with how the firm has dealt with your complaint you can take it to the Financial Ombudsman Service as soon as possible and within six months of receiving a response. The ombudsman service is a free, independent service for settling disputes between financial services firms and their customers.
The ombudsman service has a template to register a complaint about PPI which you can send to the firm that sold you the policy.
Find out more about what to do if you have a dispute or complaint.
Fairness failings

We have taken action against 24 firms for failings in PPI sales since 2005, with fines totalling nearly £13m. We also stopped the sale of single premium PPI with unsecured personal loans so consumers won’t pay upfront for several years of protection.
The quality of complaints handling is another area of PPI we have focused on.
In the past five years there have been over a million complaints made about PPI. Firms on average reject around half the PPI complaints they receive, but some reject nearly all the complaints, according to figures we received from 18 major sellers of PPI.
Nearly one-third of rejected complainants go to the ombudsman service, where more than 80% are overturned in the consumer’s favour.

[Turboman]

Re: Banks challenge new PPI rules

indeed. be interesting to see what happens.

best get a chivvy on with those calculations turbs/bill/marshy/pompey/nellie lol

Whats the implications of all this---is going to be like Stayed bank charges until the courts decide id old cases can be assessed for PPI mis selling ??

[pompeyfaith]

Re: Banks challenge new PPI rules

Turboman,

The FOS have stated that will not be the case and claims will continue whether that is the same outlook the banks have im not sure but claims with the FOS will continue.

I guess this is because this is only a judicial review on the FSA's Latest set of rulings unlike the bank charges which was a court case on fairness.

Two totally different sets of law.

PF

[di30]

Re: Banks challenge new PPI rules

Much of what have already been posted but more info here too....

http://home-saveclaims.co.uk/news/12...s-selling.html


12/09/2010

Millions of borrowers could see their current claims for compensation frozen if the banks demand a judicial review into the rules.

Banks are preparing to fight rules introduced by the Financial Services Authority (FSA) that would force them to compensate customers mis-sold payment protection insurance.

Millions of borrowers could see their current claims for compensation frozen if the banks demand a judicial review into the rules, which need to be implemented by all PPI providers before December 1.

The high street banks, including state-controlled Royal Bank of Scotland and Lloyds Banking Group, are thought to be considering a move in the next fortnight, issuing a “pre-action” notice to the FSA requesting that it introduce a freeze on all PPI complaints being investigated by providers.

The FSA announced a package of measures last month to improve the way banks handle complaints and
High street banks to fight mis-selling rules. prevent mis-selling. The banks are thought to be particularly concerned about a clause re- quiring them to apply the rules retrospectively to all cases, potentially costing up to £2.7 billion.

The City regulator has been hugely critical of the banks over the mis-selling of PPI and handling of complaints. It estimates the industry will deal with about 550,000 complaints a year for the next five years.

Those who were mis-sold single-premium policies could claim back as much as £1,800.

PPI policies were sold alongside loans and credit cards to cover the cost of debt repayments should the holder become ill or unemployed. However, policies were widely mis-sold to borrowers who could not qualify for a payout.

It is the single product most complained about to the Financial Ombudsman Service, which has handled 114,478 cases in five years, more than half of which have been received in the past 16 months.

The ombudsman finds for the customer in 90% of cases.

The British Bankers’ Association, the trade body, is thought to be hosting meetings between the banks about how to block the new rules. It refused to comment but has not denied that such meetings were taking place. The FSA and the banks concerned have also declined to comment.

A move by the banks to halt complaints while a judicial review is carried out would be a blow to borrowers who were mis-sold PPI in recent years.

Lucy Widenka of Which?, the consumer group, said: “We believe that anyone who was mis-sold PPI is entitled to fair redress, no matter when it was sold.”

The rules announced by the FSA last month are the result of a lengthy consultation on how to clean up the industry’s response to PPI complaints. It has run alongside efforts by the Competition Commission to improve the way that PPI is sold, banning lenders from selling policies for seven days after a new credit card or loan has been approved.

In July, Lloyds Banking Group, Britain’s biggest savings and loans provider, confirmed that it would nolonger sell PPI, in part as a response to the crackdown by regulators.

[pompeyfaith]

Re: Banks challenge new PPI rules

In July, Lloyds Banking Group, Britain’s biggest savings and loans provider, confirmed that it would no longer sell PPI, in part as a response to the crackdown by regulators.

Like that part they must of known they where wrong otherwise why stop selling it if they were so sure it was a good product why did they not seek court action then.

PF

[di30]

Re: Banks challenge new PPI rules

Like that part they must of known they where wrong otherwise why stop selling it if they were so sure it was a good product why did they not seek court action then.

PF
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I'm with you PF, they are as guilty as sin here!
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Damn cheek of RBS and Lloyds with them being partly owned by British Tax payers!!!

[pompeyfaith]

Re: Banks challenge new PPI rules

Lets remember here the FSA and competition commission have been investigating this since 2005 yup 5 yrs ago they have all the time in the world to bring court action if they were so sure PPI was a good product.

They have also admitted many times over that they missold it.

I really believe they are going to have a harder case to prove here.

Bring it on !!!!!!!!!!!!!!!!

PF

[di30]

Re: Banks challenge new PPI rules

Yes bring it on, somehow I don't think its going to be as easy for them as when it came to the charges, it will be a bit of a battle, but as stated "they have admitted liability of mis selling" why should they get out of this one too!!!

[di30]

Re: Banks challenge new PPI rules

This is quite old from 2007, the link from the British bankers association taken me to the FSA link


http://www.fsa.gov.uk/pages/Library/...2007/043.shtml

Consumers to benefit from PPI refunds agreement



Clive Briault

This is an excellent outcome that delivers concrete benefits for consumers.



FSA/PN/043/2007
29 March 2007
Consumers who have bought payment protection insurance (PPI) with a single premium will benefit from a series of measures relating to the fairness and transparency of refunds agreed between the Financial Services Authority and the PPI industry.
Clive Briault , FSA Managing Director of Retail Markets, said:
"This is an excellent outcome that delivers concrete benefits for consumers. When properly sold, PPI can provide valuable protection. But we have been particularly concerned with so called 'nil refund terms'. These are contract terms that prevent consumers from receiving a partial refund if they cancel a single premium PPI policy for any reason. Such reasons could include consumers repaying the associated loan early or no longer being able to make claims due to changed circumstances."


The agreement, secured in collaboration with a number of trade associations, means that on single premium PPI policies, firms should:

• not include nil refund terms in contracts with new customers;
• not apply nil refund terms in contracts with existing customers;
• contact existing customers if their contracts contain nil refund terms to inform them of how refunds will be dealt with in practice;
• treat their customers fairly if they need to reissue the associated loan in order to cancel the PPI;
• calculate the refund fairly, taking into account their reasonably incurred costs, which may or may not result in a pro-rata refund; and
• include in new policies examples or a table to illustrate how refunds will be calculated to improve transparency.

The FSA has been concerned with the overall fairness and transparency of refund terms in single premium PPI policy contracts and particularly the operation of nil refund terms. While there are firms that already provide a refund, the agreement is designed to make refunds clear and fair for all consumers.
Single premium policies involve the consumer paying for the cover for the duration of the loan by a lump sum at the start of the contract. The premium is usually added to the total value of the loan with interest charged on top. This is in contrast to regular monthly premium payments which incur no further cost to the consumer if cancelled.
Existing customers with nil refund terms in their policies should be contacted by their firm to be informed of how refunds will be dealt with in practice. They should consider this communication carefully and contact the firm if they have any questions. Also, customers who are thinking about cancelling their policy should ask their firm what refund they would receive. Customers may not receive any refund if they cancel very close to the end of the policy or if they have already made a successful claim under the policy.
The FSA's work on nil refund terms is part of its major programme designed to improve standards in the PPI market. The FSA is currently in the third stage of its work in this area - details are available in FSA Press Notice 003/2007 (link). The FSA will be verifying whether firms are complying with these outcomes on refunds as part of this. The FSA also intends to develop a comparative table to help consumers shop around for PPI. This forms part of a range of FSA initiatives aimed at helping consumers achieve a better deal on PPI.


The FSA's advice on PPI for consumers is:

• PPI is almost always optional and you should not be refused credit if you decide not to buy it;
• Consider your own personal financial circumstances, including any other insurance cover or savings you already have, when deciding whether you need it;
• If you do need it, make sure you are clear about what you will be covered for and what won't be covered - for example any exclusions relating to the nature of your employment or your medical history;
• Ask before buying if you are uncertain;
• Remember, you don't have to take out PPI from the same place you get your loan from - shop around to compare benefits and prices;
• Check what you will get back if you cancel the policy or repay the loan early.

The FSA has been promoting its resources designed to help consumers become more capable and confident about buying insurance. Our moneymadeclear website has clear, impartial information to give consumers a head start.
Notes to editors

1. The FSA is today publishing material about the outcome of its single premium PPI refund on its corporate website.
2. The trade associations involved in the agreement are The Association of British Insurers, the British Bankers' Association, the Council of Mortgage Lenders, the Finance and Leasing Association, and Protect.
3. Last year, the FSA published several undertakings and statements from firms who had agreed to provide consumers with refunds if they repaid their loan early. These are detailed on the undertakings and statements page of the FSA website. In addition, members of some trade associations gave voluntary commitments last year to give an appropriate refund where customers have repaid their loan early and have not made a claim.
4. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
5. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness

[pompeyfaith]

Re: Banks challenge new PPI rules

Oh nice find Di thank you have bookmarked that for tomorrows reading.


PF

[di30]

Re: Banks challenge new PPI rules

This is what I was meant to post up.......its right what it says about banks trying to wriggle out of it....... to ensure customers are treated fairly.

http://www.google.com/hostednews/ukp...1286560186927A

Banks fight PPI compensation rules
(UKPA) – 4 hours ago


Banks have announced plans to challenge through the courts new rules on the way they must handle complaints about controversial payment protection insurance.

The British Bankers' Association (BBA) is asking the High Court to carry out a judicial review of the Financial Services Authority's rules on the handling of PPI complaints, which are due to come into force at the end of this year.
The rules include new guidance on the way firms must handle complaints and pay compensation to customers who think they were mis-sold PPI.

It also sets out details on when companies must review previous complaints to see if there were serious flaws in their sales practices that may have affected both customers who did complain and those who did not.

The BBA has not given details on what aspect of the new rules it wants reviewed, but it is believed to be challenging the FSA's decision to impose the new guidance retrospectively on sales that took place before it was introduced.

PPI covers debt repayments if the holder is unable to work due to an accident or illness or if they are made redundant.

But it has come in for heavy criticism after research found it had been mis-sold to many consumers who would never be able to claim on it, while others felt pressurised into taking it out alongside a loan or credit card.

In the last five years there have been more than a million complaints made to firms about PPI. The product currently accounts for around a third of all the complaints the Financial Ombudsman Service receives, with nine out of 10 complaints upheld in consumers' favour.

The FSA said it will contest the review, adding that firms would have to continue handling complaints on the issue while the process is taking place.
Peter Vicary-Smith, chief executive of consumer group Which?, said: "It makes you wonder what planet the banks are living on. Not content with the billions they have made from this over-priced, flawed and frequently mis-sold product, the banks now seem to be trying to wriggle out of implementing changes that would ensure consumers are treated fairly."
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Oh nice find Di thank you have bookmarked that for tomorrows reading.

Would love to stick that in from of the Judge lol from the claimants too rofl

PF

Not a problem, the more you get behind you the better.

Di

[EXC]

Re: Banks challenge new PPI rules

I reckon Barclays are the driving force behind this as they have more to lose than most.

Barclays PPI operation is run offshore from Ireland - well out of the reach of HM Revenue & Customs - and is one of the reasons that their accounts consistantly show a tax liability of just 8% when corporation tax in the UK is 3 times that.

I wonder if they'll instruct Jonathon Sumption QC for the JR - as they did in the bank charges test case?

[enaid]

Re: Banks challenge new PPI rules

Yes I remember when I helped claim my sisters PPI back she had to write to Dublin for the info. Thought then it was dodgy and still do.

[pompeyfaith]

Re: Banks challenge new PPI rules

if that does not prove PPI is a profit generater what does jeez