Leading claims management company, Investor Compensation, has reacted angrily at Lloyds which they claim is defying guidelines set by the industry regulator, the FSA, by putting all payment protection insurance (PPI) complaints on hold.
Lloyds’s move follows last Friday’s announcement by the British Bankers’ Association (BBA) to seek a judicial review to stop the Financial Services Authority (FSA) forcing banks to review millions of PPI sales which would lead to mass compensation for up to three million mis-selling victims, a figure which could top £2 billion.
Mike Ransom, Managing Director at Investor Compensation, is incensed at the actions of Lloyds. He said: “There has been definite mis-selling of PPI and it is outrageous that Lloyds should flout the rules and opt to completely ignore the ruling by the FSA. Yes, it may be set to cost them a lot of money but these are funds that are quite rightly due to the consumer, many of whom have been unknowingly misled. Their billions worth of PPI mis-selling has come home to roost and they must now pay the consequences.”
“In direct comparison with the Lloyd’s approach, we have been working closely with Santander to streamline the PPI complaints process, settling some claims within 48 hrs of submission. This reflects their recent stance to continue to process claims and it’s commendable that they are supporting the consumer and haven’t jumped on the Lloyds bandwagon.”
“The Lloyd’s move is deplorable, and once again reflects the contempt they have for their customers as they are the ones that are inconvenienced most. Their move is made even worse by the fact Lloyds Banking Group is 41% owned by the Treasury and is in direct contravention with the FSA requirements.”
The BBA had previously said that “the banks are currently discussing with the FSA how best to handle complaints whilst the judicial review is ongoing.”
However, in response to Lloyds Banking Group’s decision a BBA spokesperson said, “The only people who can put complaints on hold are the FSA, the Ombudsman and the courts,”
Investor Compensation will be seeking answers from the FSA as to how Eric Daniels, CEO of Lloyds Banking Group and ultimately the Approved Person responsible for making this decision, can be seen as meeting his obligations under the FSA Rules.
Mike Ransom added, “In the last five years, there have been more than a million complaints made to firms about PPI, with consumers often being sold policies alongside loans when it was unnecessary or even when they were already covered. On many occasions, borrowers were not even aware that they were paying for them. Those who believe they have been mis-sold Payment Protection Insurance should act swiftly to maximise their chance for success.”
PPI covers debt repayments if the holder is unable to work due to an accident or illness, or if they are made redundant. In the last 5 years there have been more than a million complaints made to firms about PPI. Average compensation will vary from £900 for those who were mis-sold about regular-premium PPI policies to over £2,000 for those mis-sold single-premium policies.
The regulator, FSA, believes that two and three quarter million people could be refunded as much as £2.7bn for being mis-sold Payment Protection Insurance and expects its new rules to force the financial services industry to deal with about 550,000 complaints a year for the next five years.