The growing number of mis-sold bank products to consumers is creating quite a concern, and the incessant problem is not being overlooked any longer. As bank customers become increasingly aware of the tactics used by banks to increase their profits, more and more are turning to the Financial Ombudsman Service for the help they need, which is putting the misdeeds of banks into the public eye.
Tip of the Iceberg on PPI Claims
No other statistic highlights this growing problem more than the number of PPI claims that have been filed. The FOS reports that one in ten bank customers have filed PPI claims, totaling a staggering ten percent of the population. Even worse is that a majority of the claims have been made by people who were not even aware they had bought PPI policies.
According to the head of the FOS, Natalie Ceeney, many PPI policies were automatically included with loans, causing many bank customers to be unaware that they had bought the policies. Due to these sneaky business tactics, customers should ask their banks whether or not they have the policies before being charged too much. According to Ceeney, rather than being sold directly, many PPI policies have been added through a claims management company, which is causing further confusion and frustration.
Ceeney told the BBC that many banks have accused claimants as trying to try out the PPI claims process to see whether or not the banks will perform adequate checks and give them money. However, she states that only three percent of all PPI claims have been found to be fraudulent. Based on these figures, it appears that banks are trying to demonise customers in an effort to deflect attention from their misdeeds.
PPI is more complained about than any other product, according to Ceeney. So much so, that the FOS will be adding another 1,000 employees over the next six months just to investigate the increasing number of complaints. Even with the added employees, due to the fact they are dealing with the biggest scandal of this kind in the history of Britain, the FOS may take up to 18 months to settle a claim.
Apparently up in arms over the mis-selling scandal and the drain on the government budget, Ceeney believes the problem lies in the banks not performing their own in-depth investigations. After all, the FOS was established as a last resort, not as an organisation to settle every claim or dispute that pops up.
According to the FOS’s recently published annual review, the next big bank mis-selling problem could come in the form of packaged or paid-for current accounts. A growing number of bank customers are actively complaining that the additional account features they are paying for are of no service to them. Essentially, they are paying for features that they receive no benefit from.
Also, a number of bank customers have reported that banks are switching them from current accounts to paid-for accounts without their consent or knowledge. The majority of customers do not even realise the change until the charge is deducted from their account.
Similar to PPI customers, banks are selling paid-for packaged accounts to people without taking into account their individual situations. According to the FOS, some people have found that they have add-ons that do not match up with their needs, such as being too old to receive adequate use of added travel insurance.
Further alarming is the fact that the ombudsman has reported that some customers only came to the realisation that they have a packaged account after a charge showed up on their monthly statement under the guise of an administration fee or some other unclear name.
In a consistent effort to inform and help customers, the FOS released guidelines to every bank that stated they must send out statements that inform customers of their eligibility. Unfortunately, many customers are feeling pressured into opening accounts they are not sure are right for them and their situation.
Since forming, the FOS has seen the number of complaints coming through the watchdog increase by as much as 92 percent. Barclays, the Royal Bank of Scotland, Lloyds, and HSBC have accounted for nearly two-thirds of all of the complaints the ombudsman has received. In fact, Britain’s four largest banks have seen a 52 percent increase in complaints over the previous year alone.
Maple Leaf Financial PPI Claims
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