PPI Claims: BBA Drops PPI Court Appeal

After talks with the Financial Services Authority over the weekend, the BBA of the British Bankers Association has come to an agreement with the City watchdog not to appeal the high court decision’s to repudiate the lawsuit on the new ruling of PPI compensation; after top major banking groups have announced their withdrawal from the plea; following Barclays and Lloyds’ move to pull out their support from the banking trade body in their interest to regain consumer confidence.

PPI Claims

Although the body has not abandoned their “essential principles”, the BBA promised to take its matters through other means with the authorities.

Following Barclays’ announcement of its discontinuation of the law suit, and also its £1 billion compensation fund, on Monday, May 9, HSBC also declared a total amount of £269m PPI redress for their consumers who have been mis sold PPI. On the other hand, The Royal Bank of Scotland – 83% public-owned – warns their shareholders of high costs and has not yet said how much it will set aside. Analysts estimate costs of about £1bn in PPI provision.

Lloyds Banking Group have reported a provision of £3.2bn for PPI compensation.

Money saving expert Martin Lewis calls this a hay day for the millions of customers who have been victims of bankers greed and can now ask for justice by reclaiming mis sold PPI.

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PPI Claims: Barclays Abandons PPI Court Appeal

Now with a second of its member bailing out of the controversial PPI court case, The BBA or The British Bankers Association’s attempts to overturn policies on selling PPI is predicted difficult to continue.

The Royal Bank of Scotland and HSBC are left in the legal custody after Barclays has pulled out of the case. Barclay’s chief executive Bob Diamond personally sanctioned the move just after two days since Lloyds decided to discontinue the dispute against the Financial Services Authority, and is expected to announce its discontinuation as early as Monday.

The decreasing number of support has affected the case, as the remaining members of the banking trade body has to come up with a decision on Tuesday whether to appeal a decision by Mr Justice Ouseley, who dismissed its original case against the financial regulator.

BBA’s chief executive Angela Knight argued that both the FSA and the Financial Ombudsman Service had retrospectively changed the rules on selling PPIs which set a dangerous example.

Knight further stated that although banks are obliged to compensate their consumers over mis sold PPI, banks have to notify that the guidelines on who were affected were different in the process.

Banking sources recognize the importance of the issue; however, political and public pressure is no longer a compelling method in maintaining legal action. The FSA is set to make agreements with banks over the weekend, and will announce their decision within the next 48 hours.

Pressure is mounting on RBS to follow Barclay’s footsteps, while its other member, HSBC, remains grounded; understanding how key legal principles at stake can hurt its business in the future if it gives in.

After chief executive Bob Diamond raised its compensation amount, Barclay’s consumers can expect payout of up to £3.2billion

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PPI Claims: Lloyds Banking Group Abandons Court Appeal

Consumers are hopeful that other high-street banks will follow after Lloyds announced that it will settle claims of the controversial Payment Protection Insurance following Thursday’s new ruling.

The bank pulled out of legal action to stop the payout and will resume all PPI compensation. It is also in contact with the Financial Ombudsman regarding cases that have been passed on.

Lloyds invited customers whose PPI Claims were turned down and to re contact the bank if the ruling was unfair.

However, they will not entertain customers suspected of being mis sold PPI before.

The biggest PPI provider reserved £3.2 billion to cover for compensation, a bigger cost than the Financial Services Authority had expected. They estimated a pay out of £4.5bn.

Government-funded Consumer Group Consumer Focus spokesperson says that the mis-selling was on an epic scale. Every Bank involved must now accept the consequences of their actions and give speedy redress to all affected customers.

PPI is insurance bundled with loans and credit cards and is originally intended to cover repayments when one falls ill or loses one’s job and there fore loses the capacity to pay.

However insurance holders usually get their claim denied and face hidden excessive because of exclusions that don’t qualify them for its benefits.

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Bank Charges: What The Banks Won’t Tell You

A study that was published by The European Commission in 2009 confirmed the Customer’s preconception of current account costs have been skyrocketing in the past. The United Kingdom ranks 11th of these European Countries whose financial institutions charge unreasonably high bank charges outside of the customer’s monthly payment, thus burdening the customer with more debt.

Penalties are end results of customer’s failure or inability to pay his/her loan. More often than not, these bank charges root from financial advisers who mis-sold mortgages to consumers, often without them knowing about it.

In addition, when one does not have enough knowledge about the loan and the charges and/or possible insurance that may or may not come along with it, one may easily be sold insurance, that in reality, have is optional and can be politely declined down. Banks keep this as a secret from their consumers so they could increase their revenues. They often pay big incentives to their consumers’ “trusted” financial advisers or lenders, into tricking them to buy loans; methodologically zeroing – more on the benefits than the important details of the contract – a fatal pitfall for debt.

Because of media’s ongoing pursuit for justice, awareness from print and TV compelled thousands of customers to lodge demands in order to reclaim bank charges these financial institutions have schemed to rob from them. This event has been hailed as one of the biggest consumer revolts to date.

However, banks do not guarantee their consumers that they will give back their money at a hundred percent not unless they can prove they have experienced financial hardship from overpayment of these bank charges.

This may be a little bit of a challenge, but with the right help and proper evidence to support your claim, assurance is given to those whose claims are viable.

That being said let us emphasize on evidence. Claims under these bank charges are feasible: if you have paid a penalty fee after going overdrawn without permission, which exceeds to an agreed overdraft limit, had cheques bounced, direct debits or orders that have been declined, then you have a viable case to reclaim bank charges.

Now you can calculate how much you were charged through sorting out on your bank statements. If you haven’t kept them, you can ask for a copy from your bank. Data Protection Act 1998 mandates that banks should provide consumers this specific information within a 40 day period, not charging more than ?10 for a hard copy.  You can contact the Information Commissioner if the bank refuses to provide you with this information.

If ever your complaint gets rejected, the most immediate thing to do is to go to the Financial Ombudsman Service (FOS). The office orders companies to pay compensation for valid cases even if the bank has previously rejected it.

Do not be intimidated by how tedious and time consuming this process may take, instead, focus more on how your hard-earned money was pulled away from you without your knowing, after all, it is your legal right and it should not be any less of a strong motivation to reclaim your money.

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5 Ways Banks Will Pad Their Profits This Year

The cost to do your day-to-day banking has steadily increased over the last decade. To supress the rising costs, congress implemented new federal regulations designed to protect the consumer and limit how much banks can charge. Caps were placed on certain types of fees and how banks could apply them. Banks had warned regulators that they would need to replace that income through other means. Since the rules were finalized, banks have been increasing non-regulated fees and finding other ways to pull money from their customers. Here are the top five ways that you will feel the pinch this year: (Find out how to get the bank to pay you for using their services, not the other way around. Check out Cut Your Bank Fees.)

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1. Checking Account Fees
Free checking accounts have been a huge draw for banks over the past decade. It brought customers in the door, where they could be sold other, more lucrative banking products. The days of free checking are coming to an end. Many of the big banks recently implemented mandatory maintenance fees on all of their checking accounts across the board. Review your bank’s fee policy because there still may be ways you can avoid these fees, such as carrying a minimum balance or performing a minimum number of transactions each month.

2. Debit Card Rewards
Many banks offered loyalty reward points on their debit cards to encourage their customers to transact more often. These points could be accumulated and used to purchase gift cards or other items. According to the banks, these rewards were funded with the debit card fees the retailers were charged. When the 2010 legislation limited the amount of fees banks could charge for each debit transaction, debit card reward programs began to disappear. Expect that change to be implemented at more banks this year.

3. Overdraft Fees
The new legislation also put rules in place about overdraft protection. Customers now have to opt in to the coverage on debit card and ATM transactions. These fees are a major source of income for banks so these changes made some banks get creative. Many banks have raised their overdraft charges and some are hovering around the $40 mark. Banks are also allowed to keep control over how they charge the fees. Several banks order transactions by largest to smallest. For example, if you have your mortgage payment, a car payment and several smaller transactions going through and there are not enough funds to cover all of the transactions, the smaller amounts will attract the overdraft fees. This maximizes the bank’s overall income. (Find out which type of account suits your specific needs. See Demystification Of Bank Accounts.)

4. Mortgage Insurance
The purpose of mortgage insurance is to pay off the balance of your mortgage if you are unable to meet the required obligations. It has always been a money-maker for banks that own the insurance company providing the insurance. It is required on almost all mortgage deals where there is less than 20% equity. It has never been a good deal for consumers. You pay the same premiums for the life of the contract but you receive a diminishing payout as you pay down your mortgage. For example, if your mortgage is $250,000 when you first buy your house, the policy would pay your beneficiaries that amount of money to pay off the mortgage. Fifteen years from now, however, your mortgage balance might only be $40,000 and that would be all the policy would pay out, even though you have paid the same premiums throughout. What banks don’t tell you is that you can request in writing to end the mortgage insurance once the balance has dropped enough that there is 20% equity. Term life insurance is a better option for covering the balance of your debts.

5. ATM Fees
This is another lucrative income stream for banks and is getting more so. Several banks have announced that they are testing out higher fees for non-customers who use their machines and for their customers who use other banks’ ATM machines. In some areas of the country, non-customer fees are $5 per transaction. When using another bank’s ATM, a consumer pays twice: A fee from the other bank and a fee from their own. To avoid these fees, plan your cash needs more carefully and use only your own bank’s ATM to withdraw money.

The Bottom Line
As banking fees increase, you will have to be a smarter consumer to navigate the potholes and keep your money in your pocket. Take time to understand your bank’s fee structure and shop around to see what else is out there. (Whether you’re moving or have just found a better no-fee plan, find out how to switch banks with ease. Read How To Break Up With Your Bank.)

Original story – 5 Ways Banks Will Pad Their Profits This Year

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Where Are The Promised Banking Reforms?

I’m sure most of you remember the first ever televised debate with the leaders of the political parties.  How they all promised to change the face of banking in the UK and clamp down on bankers bonuses.  Ten months later, we ask what has been done to ensure that the banks don’t rip us off again and hold us to ransom by gambling away the taxpayers money.

We are still feeling the aftershocks of the banking crash that caused the recession.  The banks tried to get rich by selling mortgages to anybody with a pulse, fuelling the property boom.  The overinflated property prices led to excessive borrowings which could not be repaid.  In the end, the borrowers were left holding properties with negative equity and huge mortgages that they were unable to service.  The banks were bleeding money as they could not balance their books, and had to be bailed out by the tax payers – the very people who the banks have been screwing over for decades.

The greedy bankers walked away from this with big smiles on their faces – no punishment for their failures just business as usual and rewarded with huge bonuses again.  Nick Clegg said he would break up the mega banks like Lloyds TSB – that has not happened.  David Cameron said he would clamp down on bankers bonuses and has now done a u-turn saying that we need to reward the bankers or risk losing them to foreign banks.

It’s frustrating as a consumer, to have to sit and watch as the banks continue to take from the poor to give to the rich undre the protection of the MP’s who were voted in by the people to protect the people.

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PPI Judicial Review: Where Is The Media Coverage?

If you’ve borrowed money from your bank in the past ten years, chances are you were told that you must take out Payment Protection Insurance, or PPI, with your loan or credit card to increase your chances of borrowing.  This is a classic example of of ppi mis selling that was common practice by the sales staff at your local bank.

After letting the banks get away with mis selling ppi to their customers for over a decade, the FSA fined imposed huge fines on the banks.  Most of the major high street lenders were fined for mis selling PPI, with the Alliance & Leicester receiving the highest fine of £7.1 million.  Two years on and after thousands of ppi complaints, the FSA finally got its act together and introduced guidlines on how to deal with ppi complaints, and threatened to take action against anyone who didn’t follow the new guidelines.

Unfortunatley, the banks who are a law unto themselves, decided to challenge the new guidelines in court.  Led by the British Bankers Association (BBA) they have been in court since the 25th January 2011, trying to argue that the new guidelines cannot and should not be enforced.  Now considering that the BBA are not arguing whether or not the banks were infact mis selling ppi, and the fact that if they lose it could cost them an estimated £5 billion you would think that there would be more said about it in the news.  Add to this the fact that there are still millions of people who have been charged tousands of pounds for an insurance policy that they can not claim on when the need arises and we have a story that really is worthy of media coverage yet has had very little air time.   

Fortunately, there are companies out there that are helping to raise awareness of ppi mis selling and helping people to process their ppi claims.

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