Thousands of bank customers’ owed refunds will not get their money in time for Christmas, even though their complaints were lodged months – and possibly even years – ago.
Some families are owed as much as £10,000 as a result of banks wrongly selling overpriced, and often useless, Payment Protection Insurance (PPI).
Shocking evidence of lengthy delays comes just as three of the biggest culprits – are supposed to meet new, tighter complaints handling deadlines laid down by the Financial Services Authority. From January 1, all banks will have to deal with complaints relating to PPI within eight weeks, the FSA has said.
Having received more than one million PPI complaints this year, banks face huge logistical challenges. Eric Lenders of the British Bankers’ Association says: ‘There is no doubting the volumes are very large and banks have had to build substantial resources very quickly.’ He says it has been difficult in some cases to find and train staff.
But the scale of the complaints may not be the only cause of delay. Some banks are suspected of deliberately dragging out the compensation process, hoping complainants will give up. PPI was meant to cover loan repayments if borrowers lost their income through redundancy or ill-health. The insurance was ludicrously expensive, with upfront premiums frequently exceeding £5,000.
As well as mis-selling PPI on a scale that could eventually cost it £3.2 billion in refunds, banks have not always retained all the paperwork after six years. So in cases where no records exist apart from evidence that you bought the PPI a financial institution may only pay an estimated £1,200 per policy. This figure derives from average premiums in cases handled by the Financial Ombudsman Service. The FSA said: ‘We will be monitoring progress carefully.’
Ombudsman is inundated
FOR years, banks denied there was widespread mis-selling of PPI, despite overwhelming evidence in the form of hundreds of thousands of cases. When the Financial Services Authority belatedly tried to force the banks to refund customers, they challenged the regulator in court. Earlier this year, the banks lost their case.
But while these legal proceedings dragged on, huge backlogs of complaints built up. The FOS has received a total 300,000 PPI complaints in the past decade, but they are now coming in at a rate of 100,000 a year, and the FOS reckons volumes will rocket.
Sally Bowyer, Managing Director of leading claims firm, BrunelFranklin.com said: “So few people know that they were ever sold PPI that some commentators believe there may be 30-35 million policies in existence, the majority of which could have been mis-sold. If you have genuinely been mis-sold a policy, you should be looking to get back your full premium plus interest, by way of fair redress.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.