Lloyds recently announced that one of its centres specialsing in handling PPI complaints has produced obvious shortcomings. The announcement comes on the heels of discovering that a Times reporter went undercover at one of the bank’s notorious complaints handling centres.

The Times reporter claims he was told to “play the system” and that he was taught to ignore any complaints of possible fraud committed by salesmen of the banking giant. Furthermore, the reporter added that he was told that the complaint handler position can be “morally difficult” and that he should ignore any fraud red flags.

Lloyds admits PPI Complaints Mis-handling

As a response to the reports, Lloyds admitted to identifying issues at the centre in a separate investigation, and that the advice given to the reporter was “isolated” and currently being addressed.

The reporter went undercover at the Royal Mint Court PPI complanits handling centre in London, which was operated by Deloitte, a third-party complaints handling service that also has contracts with Barclays. Lloyds terminated its contract with Deloitte in May after receiving news of these reports in a clear attempt at damage control.

According to Lloyds, they are now using a new supplier and retraining the centre’s employees based upon the bank’s policies and procedures. The huge PPI mis-selling scandal has cost Lloyd’s over 4.3 billion pounds in redresses paid out to 1.3 million victims of the bank’s blatant PPI mis-selling.

 

What is PPI?

An acronym for payment protection insurance, PPI was designed as a means of covering loan repayments for customers who no longer were able to make their loan payments. However, the PPI policies were mis-sold on a massive scale to customers who did not need or want the added protection.

The FCA has been inundated with PPI complaints and has taken the matter very seriously. The FCA currently reviews the PPI complaint handling procedures of numerous firms in an effort to ensure they are being properly investigated and compensation is provided to legitimate complainants.

The Real Realities of PPI Claims Handling

According to the Times, the Deloitte-run handling centre took blatant steps to avoid claims management companies that strive to win compensation for their clients. The reality of the matter is that Lloyds customers who were mis-sold PPI are facing numerous capitalistic and bureaucratic roadblocks when seeking redress from the bank.

Although the bank has added thousands of staff members and devoted millions of pounds to tackle the avalanche of PPI claims, it is clear that the bank is not keeping pace. In fact, this past February Lloyd’s was fined 4.3 million pounds by the FCA for not sending timely PPI compensation payments to affected customers.

Any disputed claims between the bank and its customers are handled by the Financial Ombudsman Service, and the latest data from the FOS shows that the service has received over 42,000 PPI claims for Lloyds alone in the second half of 2012, far surpassing the number of claims received from any other financial institution. In these cases, the FOS sided with customers and demanded that they be compensated a staggering 86 percent of the time. In comparison, only 60 percent of PPI complaint cases handled by the bank’s Royal Mint Court were in favour of the customers.

Ongoing PPI Investigations

Lloyds was the first banking institution to begin paying PPI claimants back in 2011. Since then, banks have set aside 15 billion pounds to cover the costs of PPI compensation. According to the banks, they are receiving a large number of false claims and would like to place a deadline on PPI mis-selling claims. However, according to the FOS, there are still a considerable number of potential PPI complaints and that each bank must investigate them properly. It is clear that based upon the staggering number of claimants thus far, PPI investigations could ensue for the unforeseeable future.

 

 

Maple Leaf Financial PPI Claims

Maple Leaf  Financial will contact your lender and negotiate on your behalf for your offer of settlement making sure that all calculations are correct and that other previous and subsequent loans have been taken into account.

Claiming your money back just got more personal – we’ll explain how we do it. Call now on 0800 7747 624

 

 

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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.