Tens of thousands of customers who have had complaints about payment protection insurance (PPI) rejected could be denied justice despite banks finally admitting to widespread mis‑selling.
Banks dropped their legal fight with City watchdog the Financial Services Authority (FSA) which had ordered them to compensate those who had been mis-sold PPI dating back to the start of 2005.
Up to 6.4m customers could be in line to share a payout worth around £9bn. Now it has emerged that some banks are hiding behind rules which state that they don’t have to investigate any complaint they have already rejected.
Anyone who has a formal complaint rejected must take their appeal to the Financial Ombudsman Service within six months. If they don’t, then the complaint lapses and they lose all chance to appeal unless there are exceptional circumstances such as long-term illness, being out of the country or if the lender failed to tell them of their right to use the Ombudsman.
Some banks routinely fobbed off PPI complaints for years — and around 70% of customers did not take their complaint to the Ombudsman. Even though they may have had a valid case, those customers may now miss out on compensation.
Santander says it will not consider compensating any customers who have already had their complaint rejected.
State-backed RBS and NatWest say they will offer redress ‘in line with the standards the FSA now requires’ — which does not include complaints already rejected.
Lloyds Banking Group, which includes Halifax and Cheltenham & Gloucester, simply says that customers should contact them directly. Barclays and HSBC, on the other hand, say that customers who have already been dismissed should get in touch again because the banks are now assessing complaints differently.
RBC MON£Y will take on any claim and work on your behalf whether you have tried yourselfand failed, not been compensated fairly or a brand new claim.
While the Financial Ombudsman Service has been seen to take up to 2 years to resolve complaints and having previously upheld almost 90% of PPI complaints, recent figures suggest the number of complaints upheld by them has decreased to 53%.
Alan Hoey, Managing Director from RBC MON£Y said “there has been some bad press recently about Claims Management Companies and we are glad the regulators are looking closely at these companies who do not follow the rules. Our expertise is there for our clients who need their complaint reperesented professionally. We know the banks do not play fair and often consumers can end up confused by legal jargon. Our service is professional and we have the experience to assess and represent a claim on its individual merits whatever the situation, we are here to help.”
