Almost every second financial institution had the time of their lives a decade ago when PPI was first introduced in the market. The amount of money they were robbing off their customers was huge. When the policy was being mis-sold without the knowledge of the buyers, financial companies were swimming in profits. The amount of commission increased which further gave a boost to other activities of the concerned institution.
But as they say, “sunshine never lasts forever”.
Eventually the PPI scam was exposed by consumer groups and the media. Billions of pounds worth of PPI policies were mis-sold, which also meant that the companies had to pay back billions to the affected buyers. Majority of the affected buyers didn’t realise about their mis-sold policy initially. It took a fair amount of time for majority of the mis-sold buyers to find out about the policy they had due to the way it was mis-sold and the general ignorance of the buyers towards the product.
The whole saga has rumbled on for quite a while now and even today many people are making complaints regarding their mis-sold policies. The complaints started getting registered almost a decade ago, but new claimants are coming forward every day after recognising the fact that they had been manipulated by their financial companies. This has created havoc for the banks and other financial companies who have been selling PPI to the customers. For years, they have been trying to settle as many cases as they can. Most of the banks have set aside billions to make sure that their mis-sold customers get their compensation back. However, this doesn’t seem to be working too effectively. The financial companies, in spite of all their efforts, are not able to bring down the PPI complaints even after all these years.
Major Culprits Of The PPI Saga Based On The Ombudsmans Figures
Past Ombudsman figures have highlighted Lloyds Bank as one of the worst for using unfair settlement tactics, and recent figures reveal that 78 per cent of the complaints against the bank were upheld between July and December. Financial companies are still failing to deal properly with customer complaints, judging by the latest figures from the Financial Ombudsman. They reveal that the numbers of complaints about mis-sold PPI remain high while there continue to be an alarmingly large numbers of decisions ruled against some financial institutions. The banks have repeatedly faced accusations that they have compounded their crimes in the biggest scandal ever to hit the industry by using delaying tactics to try to wear people down in the hope that they will give up their claims.
The claim upheld rate is same in the first six months of the year but actually higher than the 74 per cent of complaints upheld again the bank between July and December 2014. This suggests that Lloyds is making even less of an effort to deal fairly with customers looking for the compensation they are entitled to. Just like the high-end commercial banks, credit card companies also seem to bear the brunt of this issue as they had also been an active part of the PPI scandal. Several credit card companies have also been lethargic in sorting out the issues of their customers related to PPI. Capital One was ruled against in 74 per cent of cases taken to the Ombudsman while at MBNA the figure was 69 per cent. In contrast, while Bank of Scotland had more complaints than any other individual financial business, the number upheld against it was less than half, at 47 per cent. The compensation bill from the banks forced to repay consumers mis-sold PPI is fast approaching £30bn and despite the Financial Conduct Authority enforcing a deadline (29th August, 2019) on the number of complaints, there is little sign of a let up in the tide of fed-up consumers.
No Let-Up In The Number of PPI Claims Being Brought Forward
No matter how many claims the financial companies settle, there always seem to be an increase in the number of claims being brought forward every day. The figures reveal there were 92,667 new PPI complaints in the last six months of the year, almost the same as the previous six months when there 94,091. However the number of complaints about financial companies taken to the Ombudsman fell slightly in the second half. It took on 164,347 new cases, a fall of 6 per cent from the first six months of the year. These statistics are enough to prove the fact that the damage done is huge and the financial companies are not likely to get any relief from PPI related claims anytime soon. It is easy to evaluate the amount of policies to be mis-sold during the scandal.
The sole reason behind companies not being able to reduce the number of complaints is the unreasonably huge amount of policies that were sold to the customers. Clearly, the smartness of the financial companies seems to have backfired in the form of continuous and heavy compensations. The biggest of financial institutions are now facing a little difficulty in taking care of the funds to be given to their customers. Most of them are not able to deal with the heavy expenses which are incurred in taking care the PPI issues of the mis-sold policies. Such expenses affect the normal functioning of the companies as well. I
Inspite of the companies doing all they can, they have been unsuccessful in stopping the bleeding of funds draining out on account of PPI compesations. This scenario also doesn’t seem to end at least for the next couple of years. The deadline set by the FCA might have given considerable relief to the financial companies, but at the same has also increased the current rate of complaints being filed with them. As the FCA has also taken rigorous steps in encouraging masses to check their financial products, people have become more aware and are filing complaints every other day. Due to this, the financial companies may have to set aside an even bigger amount for paying back their customers’ compensation. Certain banks tried resorting to further manipulation and tricks, but had to face vehement opposition from their customers as well as the media. The current condition of these companies is beginning to get poorer every passing month. They are indeed reaping what they sowed long back!