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Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......
From today's Times:
Banks buckle under deluge of loan insurance complaints
Big banks are being flooded with thousands of customer complaints about payment protection insurance and are managing to settle only very few cases, according to industry sources.
One large bank is understood to have received almost 7,000 complaints in a single week recently, and had settled fewer than ten cases. Industry insiders said that the banks were struggling to increase workforces and other resources, such as IT systems. Nonetheless, banks are doubling or tripling their complaints-handling staff in Britain, increasing the total employed across the industry by thousands in an attempt to meet the flood of complaints.
One insider said that the level of claims coming through the door was “an enormous challenge”, adding that one big problem was that banks were trying to employ significant numbers of staff from the same relatively limited talent pool.
An option being considered by some banks is to sign outsourcing contracts with Indian companies to keep costs under control and to deal with the level of complaints. Such a move might be considered controversial because some decisions about PPI mis-selling are complex and may not be resolved easily by external contractors.
There is a possibility, too, that customers, who already believe that they have been mis-sold a product, find themselves caught up in a frustrating process to try to resolve the issue, financial insiders warned.
With a final compensation bill expected to be up to £8 billion, PPI is the biggest mis-selling scandal to have hit the banking industry. PPI was insurance intended to pay loan bills in the event of the policyholder losing earnings through ill-health or redundancy, but many people were unaware that they were paying for it or were sold policies when the fine print excluded them from ever claiming.
Late last year the Financial Services Authority ordered banks to apply new rules to how they sell products, requiring them not only to supply customers with documents stating the terms and conditions but also to talk them through the details.
The change, which applied to old and new policies, led to panic among the banks as it left them open to millions of mis-selling claims over PPI, triggering protracted legal action.
The banks abandoned their case only when Lloyds, the biggest PPI seller, broke ranks in May and walked away from the case, earmarking £3.2 billion to pay victims.
Because banks froze all work on compensation claims during the legal case, since May they have been swamped with historic and new claims.
The logjam makes the situation different from previous mis-selling problems, when banks have been able to increase their staff over time, industry sources said.
The FSA has already waived the normal rule stipulating a response to complaints within eight weeks, giving banks more breathing space to deal with PPI claims.
A rolling programme of deadlines has been introduced, with the first date of August 31 looming for decisions on complaints put on hold while banks pursued their court case.
The industry believes it will take about two years to clear the complaints.
From today's Times:
Banks buckle under deluge of loan insurance complaints
Big banks are being flooded with thousands of customer complaints about payment protection insurance and are managing to settle only very few cases, according to industry sources.
One large bank is understood to have received almost 7,000 complaints in a single week recently, and had settled fewer than ten cases. Industry insiders said that the banks were struggling to increase workforces and other resources, such as IT systems. Nonetheless, banks are doubling or tripling their complaints-handling staff in Britain, increasing the total employed across the industry by thousands in an attempt to meet the flood of complaints.
One insider said that the level of claims coming through the door was “an enormous challenge”, adding that one big problem was that banks were trying to employ significant numbers of staff from the same relatively limited talent pool.
An option being considered by some banks is to sign outsourcing contracts with Indian companies to keep costs under control and to deal with the level of complaints. Such a move might be considered controversial because some decisions about PPI mis-selling are complex and may not be resolved easily by external contractors.
There is a possibility, too, that customers, who already believe that they have been mis-sold a product, find themselves caught up in a frustrating process to try to resolve the issue, financial insiders warned.
With a final compensation bill expected to be up to £8 billion, PPI is the biggest mis-selling scandal to have hit the banking industry. PPI was insurance intended to pay loan bills in the event of the policyholder losing earnings through ill-health or redundancy, but many people were unaware that they were paying for it or were sold policies when the fine print excluded them from ever claiming.
Late last year the Financial Services Authority ordered banks to apply new rules to how they sell products, requiring them not only to supply customers with documents stating the terms and conditions but also to talk them through the details.
The change, which applied to old and new policies, led to panic among the banks as it left them open to millions of mis-selling claims over PPI, triggering protracted legal action.
The banks abandoned their case only when Lloyds, the biggest PPI seller, broke ranks in May and walked away from the case, earmarking £3.2 billion to pay victims.
Because banks froze all work on compensation claims during the legal case, since May they have been swamped with historic and new claims.
The logjam makes the situation different from previous mis-selling problems, when banks have been able to increase their staff over time, industry sources said.
The FSA has already waived the normal rule stipulating a response to complaints within eight weeks, giving banks more breathing space to deal with PPI claims.
A rolling programme of deadlines has been introduced, with the first date of August 31 looming for decisions on complaints put on hold while banks pursued their court case.
The industry believes it will take about two years to clear the complaints.
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