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Misleading MBNA PPI Redress Calculations Leading to Reduced Settlement Offers
It has recently come to light that there are numerous general consumers who have doubts about how MBNA Limited are calculating their Payment Protection Insurance (PPI) Redress. The methodology that MBNA have been and are using does not appear to conform to the rules as laid down by the 'Regulator', the Financial Conduct Authority (formerly the FSA).
A Group of concerned General Consumers have joined together by writing to the Chief Executive of the Financial Conduct Authority, Mr. Martin Wheatley - and to the Acting Chief Ombudsman of the Financial Ombudsman Service, Mr. Tony Boorman - requesting their attention and direction. Anyone who feels that they may have been affected by this issue or is concerned by the manner in which MBNA Limited has been or is calculating their PPI Redress may use this template letter if applicable – or adapt it to personalise it. The more people send these letters, the more chance there is of the FOS & FCA investigating the matter and ordering MBNA to recalculate all PPI claims affected by this. Whether you have a claim or not – please send the letters.
Although we are used to sending such letters 'Tracked' or 'Signed for,' this is not strictly necessary in this case, as it is simple the sheer number of letters that matters. It is good enough of you peeps to spend £1 - £1.20 on a coupla stamps. However, if one is able to visit a post office, then on request they will issue Proof of Postage Certificates FOC.
NB – in order to fit this letter on to a single A4 sheet, set your left & right margins to 1.35cm (or less) - and top & bottom margins to 0.3 cm (or less). If you download and print the attachments at the bottom of the post, this should be done automatically.
There may be some who are interested in this matter, but cannot justify the cost of sending these letters - and that is fair enough. However, it would still be a great help if you could email the FOS & FCA a copy of this letter. It costs nothing to do that, and simply needs a few minutes of your time - and a handful of spare electrons.
Please consider emailing the letter - it would help tremendously with getting this matter looked into seriously. Here are the email addresses:-
tony.boorman@financial-ombudsman.org.uk
martin.wheatley@fca.org.uk
Both letters are attached at the bottom - along with pre-printed DL envelope addresses - and the FCA letter is copied here for quick reading:-
[Sender’s Name & Address]
Email:
Attn: Martin Wheatley - Chief Executive Officer
Financial Conduct Authority
25 The North Colonnade
London Date:
E14 5HS
(Identical copy sent to Tony Boorman, Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR)
Dear Mr Wheatley,
Request for Direction for Appropriate Attention - PPI Redress Calculations
There is a problem emerging that I believe affects tens of thousands of people which you may be unaware of, and I ask you to consider the implications of this - with the corresponding evidence – in a proper degree of depth. I am uncertain as to whether this should be best addressed to the FOS or FCA, but it may well be of equal interest to both.
The essential problem is that since approx. June 2012, the FOS appears to have been inadvertently allowing a credit card issuer to systematically undercompensate around 25,000 mis-sold PPI claimants whose claims the FOS has upheld. The FOS appears to have allowed the firm (MBNA) to continue to self-report that they are complying with PS 10/12 guidance when calculating redress, while the firm is evidentially not doing so. In comparison with what MBNA are required by PS 10/12 to calculate as a claim settlement (as per examples given in that guidance, or a fair account reconstruction method where required), redress calculations are recently typically 30% to 50% lower. Evidence of this apparent non-compliance in a number of cases can be produced using MBNA’s own documentation and reports.
I am just one of a group of people working with the above 25,000 - and all of those involved have individual hard evidence supplied by the firm of the firm’s “error-of-judgement”. This error appears to originate at management level and encourages non-compliant redress practices which are designed to appear unfathomable – yet PS10/12 compliant - to an untrained eye. To check the validity of our assertions requires a sharp focus on the methodology used by the firm. This appears – understandably - to be beyond the work requirement of an FOS Adjudicator at case level, and quite possibly beyond that of some Ombudsmen.
To understand what the firm is doing requires the attention of someone competent to grasp the structure and “intention” of the MBNA redress calculations - in comparison with PS 10/12 requirements. Once one understands the methodology - and results - of the MBNA calculations, they can be compared with what PS10/12 requirements stipulate – and particularly prominent is the contrast with the relevant Appendix 2 Example 6 method. The firm’s calculation method differs from PS 10/12 guidance by selectively making unjustifiable “assumptions,” which it then uses to substantially reduce the overall redress offered in settlement.
Around June 2012, a particularly imaginative revision was added to the firms VO20_ series of redress calculations, causing all subsequent versions to appear well outside of PS 10/12 requirements. From June 2012, the firm’s calculated redress offers have been in many cases thousands of pounds below what either PS10/12 Example 6 calculates - or what would be calculated using the correct industry regulated standards (such as the FOS-licenced Exasoft Redress Manager, etc.) to calculate a properly reconstructed account.
Thus I am seeking your help to correct what we believe is the erroneous assumption that if a firm (MBNA in particular) reports to FOS that they have made (or will make, as directed) an “FOS guidance compliant” redress calculation – then this is will be assumed by the FOS to be what they will actually do. This does not appear to have been the case with MBNA for over eighteen months, affecting tens of thousands of people’s claims. It appears that this firm may not have had their calculations properly checked since a similar situation occurred in 2010 which required correction. I therefore seek your help to submit our evidence in a way that ensures that this matter will be properly investigated and acted upon. Perhaps an initial five or ten genuine examples of this calculation method could be forwarded initially to assist the individual that will eventually investigate this matter.
So it would be most appreciated if you could put me in contact with right person to deal with this matter, when I can then explain in more detail why we believe that MBNA’s calculations are not as per regulatory requirements – and therefore show that this needs to be investigated fully. I thus look forward to your kind assistance with this matter.
Yours sincerely,
[Sign Here]
[Print Sender’s Name] - Forum Group Member.
A Group of concerned General Consumers have joined together by writing to the Chief Executive of the Financial Conduct Authority, Mr. Martin Wheatley - and to the Acting Chief Ombudsman of the Financial Ombudsman Service, Mr. Tony Boorman - requesting their attention and direction. Anyone who feels that they may have been affected by this issue or is concerned by the manner in which MBNA Limited has been or is calculating their PPI Redress may use this template letter if applicable – or adapt it to personalise it. The more people send these letters, the more chance there is of the FOS & FCA investigating the matter and ordering MBNA to recalculate all PPI claims affected by this. Whether you have a claim or not – please send the letters.
Although we are used to sending such letters 'Tracked' or 'Signed for,' this is not strictly necessary in this case, as it is simple the sheer number of letters that matters. It is good enough of you peeps to spend £1 - £1.20 on a coupla stamps. However, if one is able to visit a post office, then on request they will issue Proof of Postage Certificates FOC.
NB – in order to fit this letter on to a single A4 sheet, set your left & right margins to 1.35cm (or less) - and top & bottom margins to 0.3 cm (or less). If you download and print the attachments at the bottom of the post, this should be done automatically.
There may be some who are interested in this matter, but cannot justify the cost of sending these letters - and that is fair enough. However, it would still be a great help if you could email the FOS & FCA a copy of this letter. It costs nothing to do that, and simply needs a few minutes of your time - and a handful of spare electrons.
Please consider emailing the letter - it would help tremendously with getting this matter looked into seriously. Here are the email addresses:-
tony.boorman@financial-ombudsman.org.uk
martin.wheatley@fca.org.uk
Both letters are attached at the bottom - along with pre-printed DL envelope addresses - and the FCA letter is copied here for quick reading:-
[Sender’s Name & Address]
Email:
Attn: Martin Wheatley - Chief Executive Officer
Financial Conduct Authority
25 The North Colonnade
London Date:
E14 5HS
(Identical copy sent to Tony Boorman, Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR)
Dear Mr Wheatley,
Request for Direction for Appropriate Attention - PPI Redress Calculations
There is a problem emerging that I believe affects tens of thousands of people which you may be unaware of, and I ask you to consider the implications of this - with the corresponding evidence – in a proper degree of depth. I am uncertain as to whether this should be best addressed to the FOS or FCA, but it may well be of equal interest to both.
The essential problem is that since approx. June 2012, the FOS appears to have been inadvertently allowing a credit card issuer to systematically undercompensate around 25,000 mis-sold PPI claimants whose claims the FOS has upheld. The FOS appears to have allowed the firm (MBNA) to continue to self-report that they are complying with PS 10/12 guidance when calculating redress, while the firm is evidentially not doing so. In comparison with what MBNA are required by PS 10/12 to calculate as a claim settlement (as per examples given in that guidance, or a fair account reconstruction method where required), redress calculations are recently typically 30% to 50% lower. Evidence of this apparent non-compliance in a number of cases can be produced using MBNA’s own documentation and reports.
I am just one of a group of people working with the above 25,000 - and all of those involved have individual hard evidence supplied by the firm of the firm’s “error-of-judgement”. This error appears to originate at management level and encourages non-compliant redress practices which are designed to appear unfathomable – yet PS10/12 compliant - to an untrained eye. To check the validity of our assertions requires a sharp focus on the methodology used by the firm. This appears – understandably - to be beyond the work requirement of an FOS Adjudicator at case level, and quite possibly beyond that of some Ombudsmen.
To understand what the firm is doing requires the attention of someone competent to grasp the structure and “intention” of the MBNA redress calculations - in comparison with PS 10/12 requirements. Once one understands the methodology - and results - of the MBNA calculations, they can be compared with what PS10/12 requirements stipulate – and particularly prominent is the contrast with the relevant Appendix 2 Example 6 method. The firm’s calculation method differs from PS 10/12 guidance by selectively making unjustifiable “assumptions,” which it then uses to substantially reduce the overall redress offered in settlement.
Around June 2012, a particularly imaginative revision was added to the firms VO20_ series of redress calculations, causing all subsequent versions to appear well outside of PS 10/12 requirements. From June 2012, the firm’s calculated redress offers have been in many cases thousands of pounds below what either PS10/12 Example 6 calculates - or what would be calculated using the correct industry regulated standards (such as the FOS-licenced Exasoft Redress Manager, etc.) to calculate a properly reconstructed account.
Thus I am seeking your help to correct what we believe is the erroneous assumption that if a firm (MBNA in particular) reports to FOS that they have made (or will make, as directed) an “FOS guidance compliant” redress calculation – then this is will be assumed by the FOS to be what they will actually do. This does not appear to have been the case with MBNA for over eighteen months, affecting tens of thousands of people’s claims. It appears that this firm may not have had their calculations properly checked since a similar situation occurred in 2010 which required correction. I therefore seek your help to submit our evidence in a way that ensures that this matter will be properly investigated and acted upon. Perhaps an initial five or ten genuine examples of this calculation method could be forwarded initially to assist the individual that will eventually investigate this matter.
So it would be most appreciated if you could put me in contact with right person to deal with this matter, when I can then explain in more detail why we believe that MBNA’s calculations are not as per regulatory requirements – and therefore show that this needs to be investigated fully. I thus look forward to your kind assistance with this matter.
Yours sincerely,
[Sign Here]
[Print Sender’s Name] - Forum Group Member.
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