Should Borrowers ‘Do Their Own’ PPI Claims?

UK Consumer groups Which? and MoneySavingExpert have come together to launch an advertising campaign to encourage victims of mis sold PPI to ‘do their own claims’ rather than using PPI Claims Companies… and get this, they’re also planning to hold a “PPI summit” with the big UK banks and credit card providers with the aim of working together to “restore trust in the reclaiming process”.

This story has been published by all household news channels on the internet and in hardcopy over the past few days. Initially, we didn’t really know how to respond to it as anything that raises awareness of mis sold PPI and encourages people to claim back PPI is surely a good thing… right?

The problem we have is that they’re all focusing their attention on PPI claims companies… again… rather than putting pressure on the banks to repay their customers. If it wasn’t for the work done by some of the better claims management companies, the majority of people who have now successfully reclaimed their money… would never have done so and the mis sold PPI scandal would not have become so prominent.

The banks are still delaying the settlement of PPI complaints without punishment and would love nothing less than for PPI claims companies to disappear altogether… as this would mean that the number of people reclaiming PPI would be reduced by upto 75%.

So if Which? and MoneySavingExpert are going to see this through to the very end… until all victims of mis sold PPI have been refunded then we welcome the move. But we live in a cynical world, so please bear in mind that nobody does anything for free not even these so called ‘consumer champions’. The fact that they’re holding a summit with the banks to discuss how to eliminate PPI claims companies is not supported by us at all.

So… do we think that you should, as Which? and MSE so eloquently put it, do you own claims? Well, that depends on you really. The majority of people that use claims management companies do so because they don’t have the time, patience or confidence to deal with the banks themselves. So, if you feel confident that you can see it through then you should consider it as an option.

We recommend that you use a reputable claims management company because this will ensure that you get back exactly what you are owed. The FOS, FSA and FSCS have all come out and said that you are not likely to receive anymore money if you use a CMC compared to doing yourself. And, the MOJ has also told CMC’s that they cannot say that they will get you more than if you do it yourself… but we’ve heard form countless readers and CMC’s that the banks regularly offer less money than is actually owed. We spoke to one bank employee who told us that if he’d had a fight with his girlfriend the night before, then all PPI claims received the next day were going to be rejected!

Please consider your options carefully before deciding on which course of action to take. The banks want you to claim yourself because they’ll get away with paying you less and will receive less complaints overall… saving them £billions. But DO NOT chose a PPI Claims Company that resorts to cold calling to obtain your business and do not pay anything upfront to start your claim.

Barclays Admits Error In Mis Sold Interest Rate Swaps

Barclays has today, admitted a second serious error in relation to the sale of interest rate swaps. The bank is now fighting claims that it mis-sold hedging products to small and medium-sized business customers.

The bank has now openly stated that it has mistakenly mis sold interest rate hedges to some small business owners, using a presentation that should only have been shown to professional investors due to the complexity of the product.

A spokesman for Barclays is quoted as saying that “The wording was included in some presentations by mistake,” but added that it “did not influence the way we dealt with our customers”.

This recent admission of error by Barclays, is the second serious mistake uncovered, following a month-long investigation by The Daily Telegraph, that Barclays and other UK banks had profiteered by selling complex derivative products inappropriately to small business owners with no investment experience – no surprises there then!

Last month, Barclays was forced to apologise to the Financial Services Authority (FSA) after evidence was uncovered that revealed the bank had demanded that its clients withhold information from the regulator over the sale of hedging products.

After the revelation, the FSA forced Barclays’ investment bank to write to the businesses affected, telling them they were no longer bound by “confidentiality agreements”.

The latest error will add to the pressure on Barclays amid growing concerns at the potential scale of mis-selling claims against British banks as the banks are still dealing with an avalanche of PPI claims from customers who were missold payment protection insurance.

MOJ to Launch Investigation into PPI Claims Companies

The Ministry of Justice MOJ) has today launched an investigation into PPI Claims Companies following a deluge of invalid PPI compensation claims filed on behalf of borrowers who were allegedly mis sold payment protection insurance (PPI).

The MOJ, which regulates claims management companies, has apparently received a large number of complaints from banks over the large number of complaints, form PPI Claims Companies, where there was no PPI on the policy.

Latest figures show that UK banks are now rejecting up to half of all ppi claims relating to mis-sold PPI after a substantial increase in the number of complaints submitted in the past few weeks.

Up to 80% of these come through claims management companies, who are actively encouraging borrowers to claim back PPI with advertisements, emails and text messages as part of their marketing strategies.

One bank cheif is quoted as saying “It’s delaying things horribly… The sheer volume of submissions is distracting us from the process of paying out on valid claims.”

The PPI scandal first came to light several years ago, but the banks only really started paying the process of paying mass compensation last May after they gave up a legal fight against the FOS in their Judicial Review.

Rejection Rates from the big 4 UK Banks are s follows:

Santander 40%
Barclays 40-50%
HSBC 33%
Lloyds 33%
RBS 20%

The banks are calling for changes to the way claims management companies are regulated, and although these figures may seem alarming… lets not forget that 75% of PPI complaints rejected by the banks are infact being upheld by the Financial Ombudsman Services (FOS) – which raises questions about the figures being released by the banks and their reasons for doing so.

Let’s be absolutely honest here… there are a number of “scammers” out there posing as claims management companies that should have their licenses revoked (we will be reviewing some on Financial Reform over the coming weeks… so watch this space). But the fact that 80% of borrowers are using the services of PPI claims companies to pursue their PPI reclaim suggests that the majority are doing a fantastic job and that without them, the banks would have got away with not having to repay the money they scammed from their customers in the first place.

The banks don’t want to pay the money back. They purposefully reject a large number of claims to divert the pressure on the FOS who are already over stretched. They fought tooth and nail to avoid having to repay the money after admitting they’d mis sold PPI, and are now using whatever delaying tactics they can to minimise their losses

The regulators – the MOJ, the FSA, the FOS and the FSCS are unfortunately treating the banks with kid gloves and focusing their attentions on claims management companies rather than working on creating a process to streamline the claims process. There are still thousands of claims, which were placed on hold during the judicial review, that have yet to be settled. It’s a bloody joke!

Are Credit Cards Right For You?

Let’s face it, in this day and age, consumers need all the advice they can get on managing their finances and avoiding the pitfalls presented by over-spending! Credit cards can be of great service to people, but they can also put you in really hot water, in terms of debt! Keep reading for great advice on the best way to use your credit cards.

When getting a credit card, a good rule to follow is to charge only what you know you can pay back. Yes, many companies will require you to pay only a certain minimum amount every month. However, by only paying the minimum amount, the amount you owe will keep adding up.

When signing up for a credit card, be sure that you check out what all of the penalties are if you miss a payment. This is of great importance because some companies not only will fine you, but they may also permanently increase your APR to an extremely high percentage.

Never use a credit card to buy things you can’t afford. Just because you want a new flat-screen TV, doesn’t mean a credit card is the best way to buy it. You will pay loads of interest, and the monthly payments may be out of your reach. Leave the store, think over it for a day or so, and then make your decision. If you still plan to buy it, the store’s in-house financing usually offers lower interest rates.

Be sure that you only apply for credit cards that you know that you will need now, as well as, in the future. This is important because having too many credit cards may lead to irresponsible spending and living outside your means. Doing so may very well cause you to become buried in debt and have a hard time paying it off.

If you ever have a charge on your card that is an error on the credit card company’s behalf, you can get the charges taken off. The way you do this is by sending them the date of the bill and what the charge is.

If you have a credit card, add it into your monthly budget. Budget a specific amount that you are financially able to put on the card each month, and then pay that amount off at the end of the month. Try not to let your credit card balance ever get above that amount. This is a great way to always pay your credit cards off in full, allowing you to build a great credit score.

Consider using your credit card for major electronic purchases. Some cards offer free buyers protection plans when consumers use a credit card to purchase electronics, and these plans often exceed the standard warranty. Just make sure to pay the purchase off as soon as you can to avoid accruing large interest amounts.

Once you close a credit card account, be sure to check your credit report. Make sure that the account that you have closed is registered as a closed account. While checking for that, be sure to look for marks that state late payments. or high balances. That could help you pinpoint identity theft.

If you are going to be applying for your first credit card ever, you must be aware that your credit limit will probably be low. Many beginners think that with their good credit, they will get a high limit. In reality, companies want to make sure you can afford to pay your current limit, before offering you a higher one.

As previously stated, consumers are often alone in the financial jungle and that includes being subject to incredibly high interest rates from credit card companies! The best ways to use credit cards has been covered in this article and hopefully, you have found this information very useful and applicable to your everyday spending habits.

PPI Claims Figures Released by the Financial Ombudsman

According to recent figures released by the Financial Ombusdman Service (FOS), Barclays was the most complained about bank in the last six months of 2011, with nearly 12,000 complaints brought by it’s customers. The bank, also topped the FOS’s list for the highest number of payment protection insurance (PPI) complaints, 99% of which were found in claimants favour.

Latest figures released by the FOS show that 84% of cases brought against Barclays generally were upheld by the ombudsman - compared with an average of 72%from the other banks.

Barclays, which agreed to set aside £1 billion to cover mis sold ppi claims, issued figures last week showing a 67% increase in the total number of complaints received by its general insurance and protection business in the second half of last year (2011).

The bank previously has previously stated that excluding the PPI claims figures, the total number of complaints actually dropped by 29% in yer on year compared with 2010 and has said that tackling complaints has become a “top priority”.

Some of the other banks did not fair much better, as a huge 99% of PPI complaints involving MBNA Europe Bank and Lloyds TSB Bank were also upheld in favour of the customers, while the uphold rates for Lloyds Banking Group divisions Black Horse and Bank of Scotland were almost as high at 98%.

There were however, some large disparities between the banks in terms of the percentage of PPI claims upheld, with only 7% involving the Nationwide Building Society being resolved in customers’ favour.

The ombudsman has said it generally sees large a volume of complaints when banks either do not have the resources in place to deal with the complaints or when they are not handling the complaints properly.

10 most complained about banks according to the FOS, with the number of complaints and the uphold rate:

1. Barclays Bank, 11,524, 84%

2. MBNA Europe Bank Limited, 9,185, 94%

3. Lloyds TSB Bank 7,467, 87%

4. Bank of Scotland, 6,082, 76%

5. Santander, 5,439, 55%

6. Capital One (Europe), 5,375, 12%

7. Black Horse, 5,252, 93%

8. HSBC Bank, 4,430, 80%

9. Nat West Bank, 2,737, 85%

10. Nationwide Building Society, 2,513, 12%

10 complained about banks for PPI according to FOS figures, with the uphold rate:

1. Barclays Bank, 6,975, 99%

2. MBNA Europe Bank, 5,377, 99%

3. Capital One (Europe), 5,057, 11%

4. Black Horse, 4,999, 98%

5. Lloyds TSB Bank, 4,257, 99%

6. HSBC Bank, 2,813, 87%

7. Bank of Scotland, 1,954, 98%

8. Nationwide Building Society, 1,778, 7%

9. Clydesdale Bank, 1,336, 57%

10. HFC Bank, 1,078, 93%

Most complained about banks with the number of complaints made to the FOS:

1. Lloyds, 20,310

2. Barclays, 12,273

3. MBNA, 9,903

4. Royal Bank of Scotland, 6,553

5. Santander UK, 6,202

6. HSBC, 6,190

7. Capital One, 5,375

8. Nationwide, 2,513

9. National Australia Group, 1,829

10. Citibank, 1,572

RBS Considers Further Job Cuts Due To Slow Economic Growth

Royal Bank of Scotland (RBS) is mulling over more job cuts, the bank’s chief executive reveals in a conference.

Stephen Hester stated during the Bank of America Merrill Lynch Banking & Insurance CEO Conference, his bank will more likely increase job-shedding, as economic conditions are not improving. Moreover, its exposure to Greek debt further depressed investment and customer activity, plummeted share prices, raised the threat of a double-dip recession, and caused lower interest rates to stay at a longer span of time.

He also said that gap between lending and deposit rates, including net interest margins, would be impacted; leading to an increased examination of the firm’s cost base and loan impairment trends.

He added that worries about bank and sovereign credit have affected funding markets, swelling wholesale funding costs and generating skepticism about demand for quantitative easing.

Mr. Hester said his bank is centralizing costs and is “actively working on further cost initiatives given the economic outlook.” He emphasized investment banking as a section where cost cutting would be pressured.

The bank’s boss’ comments followed Lloyds Banking Group chief Antonio Horta-Osorio’s announcement to cut costs by £1.5 billion by 2014.

This will see job costs amounting to 15,000 among Bank of Scotland, and Scottish Widows ahead of the 28,000 the bank has already made by joined Lloyds TSB and HBOS.

The RBS chief told the conference that the Independent Commission on Banking (ICB)’s scheme to separate the retail and investment banking arm were “at the tough end of market expectations”, and the delay of implementation to 2018 will give ample time for the bank to adjust.

Record Number of Critical Illness Claims Rejected

One in ten critical illness claims, made by those suffering from a serious illness are turned down, according to a report by Money Mail. Their research suggests that the percentage of these claims being rejected by life insurance providers is at it’s highest level since 2007.

Insurers have been thoroughly probed regarding the matter, initially winning the battle against declined critical illness claims. However, the number crept up again to the tune of almost £80 million worth of claims… with many now turning to the Financial Ombudsman Service for help.

One case involves a 43-year-old woman, who was diagnosed with breast cancer; She had been turned down by her insurance provider because of some undisclosed medical condition.

Another case, involves mother of two, Caroline Quirk, who was found to be with cervical cancer who was also dismissed by her insurance provider, Scottish Provident, after not reaching the minimum month of giving up smoking – which is clearly an honest mistake.

Quirk was not reimbursed of the amount owed to her, but was given a meager £3,160 instead. After her claim, Scottish Provident terminated her policy.

The House of Lords is now raising a bill that would require insurance firms to specifically ask about any medical condition that would prevent policy holders from getting hold of their cover. They would also be obliged to pay a share of the claim if the holder made an honest mistake.

Other insurance firms like Royal London, Legal & General, and Aviva had been reported to have raised their dismissed claims, doubling last year’s number.

Meanwhile, the Association of British Insurers (ABI) has started a “non-disclosure” code that guarantees policy holders of the claim when they make an honest mistake.

A Brief History Of Banks

Infographic by Confused.com – money saving made easy.

Only Three British Banks Make It On To The 50 Safest List

German, French, Dutch and Swiss banks dominate the list of the world’s 50 safest banks. They are followed by Australian, Canadian, Spanish, Swedish, Italian, US, and Chinese banks, along with institutions from UAE, Kuwait and Japan.

Only three British banks were able to make it to the category, and that includes HSBC, at 16^th, Nationwide at 41^st, and Barclays at 49^th. Other British banks were not featured.

Santander, which has a big UK presence, landed 10th, followed by National Australia Bank, proprietor of Clydesdale and Yorkshire Bank UK, coming at 12^th.

German bank, KfW topped the list, followed by French public sector bank, Caisse des Depots et Consignations (CDC) and Dutch Bank Nederlandse gemeenten, coming in at 3rd. Luxembourg’s Banque et Caisse d’Epargne de l’Etat landed on 8^th place.

HSBC is strong enough to withstand economic crisis, evident in retaining its fourth spot in the world’s most profitable banks. This is mainly due to its strong business with booming Asian countries like India and China.

Nationwide Building Society, on the other hand, prides itself of having a “dependable business strategy” that allows it to be successful, reliable, safe, and secure, as well as

Provide their customers the confidence that “they will continue to be there for them throughout the challenging economic climate.”

Their solid business strategy also enabled them to move up from its 46^th position last year to 41^st.

Banks Continue To Use Delaying Tactics To Put People Off PPI Claims

With all the negative press that the banks are receiving for the mis selling scandals – mis sold emdowments, mis sold PPI, mis sold mortgages, mis sold interest swaps, and mis sold investments (i’m sure this list will continue to grow)…. you’d think that they would be on their best behaviour when trying to resolve complaints.

Well… that was wishful thinking…

After failing in their bid to avoid repaying customers who were mis sold payment protection insurance, they collectively set aside £billions and agreed deadlines with the FSA for settling PPI claims.

But… they’re continuing to make it as difficult as possible for borrowers to get their money back by rejecting the PPI complaints and forcing borrowers to pursue their PPI claims via the Financial Ombudsman Services… who are already struggling to deal with the ridiculously large volume of PPI compensation claims.

Senior Claims Manager at PPI Refunds UK, Rick Power, has expressed his frustration at the banks “… we ask the banks to provide us with a copy of the original credit agreements and all statement relating to our clients account… we then use this information to calculate the total refund… however, many of the banks, are now writing to us to informing us that they have never received a Letter of Authority (LOA) from the client, or the signatures on the LOA do not match their records, or some other nonsense reason… only to contact our clients directly and make a partial settlement offer that is less than half of the value of the actual refund… it’s ridiculous, the FSA needs to review how the banks are dealing with PPI claims.”

The banks have already missed their deadline for settling PPI complaints that were placed on hold pending the outcome of the PPI Judicial Review without punishment and are now flouting the rules once more to see how much they can get away with before they are reprimanded… similar to a child stealing from the cookie jar!

Remember… these are the same banks that went to court saying “We know we made £billions from mis selling PPI… we just don’t want to pay it back”… and they are used to doing as they please while the FSA watches on. This is becoming a game of wits… where the banks are trying their best to get away with having to repay the money they say they have set aside for their customers…

Our advice is to tread carefully… do not accept a settlement offer unless you are absolutely certain that it includes the PPI premium charged, plus any interest paid, plus 8% interest per annum.