Barclays, which has set aside £1 billion to cover mis-selling claims, issued figures last week showing PPI fuelled a 67% jump in the total number of complaints in its general insurance and protection business in the second half of 2011.

PPI Complaints

Barclays was the most complained-about bank in the last six months of 2011, according to the financial ombudsman, with nearly 12,000 cases brought by consumers.

The bank also topped the Financial Ombudsman Service (FOS)’s list for the highest number of payment protection insurance complaints, of which 99% were found in consumers’ favour.

Some 84% of cases brought against Barclays generally were upheld by the ombudsman, compared with an average of 72% across financial businesses.

Barclays, which has set aside £1 billion to cover mis-selling claims, issued figures last week showing PPI fuelled a 67% jump in the total number of complaints in its general insurance and protection business in the second half of 2011.

The bank previously said that excluding the PPI figure, its volume of complaints dropped by 29% in the half-year compared with 2010 and said that tackling complaints was its ‘top priority’.

A huge 99% of PPI complaints involving MBNA Europe Bank and Lloyds TSB Bank were also upheld in favour of consumers, while the rates for Lloyds Banking Group divisions Black Horse and Bank of Scotland were nearly as high at 98%.

There were large disparities between businesses in terms of the percentage of PPI cases upheld however, with only 7% involving the Nationwide Building Society being resolved in consumers’ favour.

The FOS does not comment on individual cases, but low uphold rates are generally seen as an indication that businesses are handling complaints well.

The ombudsman said it generally sees large volumes of complaints when businesses either do not have the resources in place to deal with them or when they are not handling cases properly.

Natalie Ceeney, chief executive and chief ombudsman, said the huge variation in PPI uphold rates ‘clearly highlights the difference in PPI complaints handling across major businesses over this period’.

‘It also reflects the efforts made by some businesses to resolve quickly the hundreds of thousands of PPI complaints that had built up during the banks’ unsuccessful PPI legal challenge.

‘We now hope to see all businesses who were involved in PPI mis-selling resolving their customers’ complaints fairly, properly and quickly.’

Lloyds TSB Bank was the most complained about business generally in the first half of 2011, but it was pushed into third place in the latest figures, with MBNA Europe Bank coming second.

However when the businesses were lumped together into groups, Lloyds was the most complained about overall, Barclays was second and MBNA came third.

Overall, complaints about financial services firms dropped by a third over the period, but the FOS cautioned that it expects them to rise again, fuelled by a record 165,000 PPI complaints in 2012/13.

The FOS received 100,000 new complaints between July and December last year compared with almost 150,000 during the previous six months.

Of these, 46,700 cases related to PPI, a decrease of 53% on the 98,632 cases in the first half of 2011.

The FOS put the recent ‘aberration’ in PPI cases down to banks having been given some extra time to deal with their backlogs following their unsuccessful legal challenge on PPI complaint handling last year. The watchdog is currently receiving 1,000 PPI complaints a day.

Last week the FSA revealed that nearly £2 billion of compensation payments were made last year to settle claims from the mis-selling of PPI.

The banks have set aside an estimated £7.6 billion to compensate consumers who were mis-sold this type of insurance, after a widespread mis-selling scandal emerged.

Some customers found they had taken out the policy without realising they did not have to have it or felt pressured into doing so.

The overall FOS complaints figures showed that apart from PPI, all other types of complaint increased in the last half of 2011, with life and pensions seeing the steepest percentage rise, a 42% increase to 5,230.

Complaints about mortgages increased by 38% to 5,202, while general insurance complaints rose by 22% to reach 14,535 and banking and credit cases went up by 9% to 28,913.

Here are the 10 most complained about businesses 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%

Here are the top 10 complained about businesses 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%

Here are the most complained about business groups 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
Original Article in the Independant

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim

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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.