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PPI scandal fuels record ombudsman complaints PPI scandal fuels record ombudsman complaints
(17 days later)
The scandal of mis-sold payment protection insurance drove complaints to a record high in the first half of 2013 as banks continued to drag their heels over compensating customers, the financial ombudsman said yesterday.The scandal of mis-sold payment protection insurance drove complaints to a record high in the first half of 2013 as banks continued to drag their heels over compensating customers, the financial ombudsman said yesterday.
The watchdog said it took on more than 327,000 new complaints between January and June, 15% more than in the previous six months. PPI was the source of 86% of the complaints.The watchdog said it took on more than 327,000 new complaints between January and June, 15% more than in the previous six months. PPI was the source of 86% of the complaints.
More than a third of complaints involved Lloyds Banking Group, which was the most complained-of financial firm. More than 129,000 people took complaints against Lloyds to the ombudsman – almost five times the number in the same period of the previous year.More than a third of complaints involved Lloyds Banking Group, which was the most complained-of financial firm. More than 129,000 people took complaints against Lloyds to the ombudsman – almost five times the number in the same period of the previous year.
Lloyds-owned Bank of Scotland was the most complained-about bank, with 61,000 new cases about products sold under its main brand and the Halifax name – up 57% on the previous quarter. The majority concerned PPI.Lloyds-owned Bank of Scotland was the most complained-about bank, with 61,000 new cases about products sold under its main brand and the Halifax name – up 57% on the previous quarter. The majority concerned PPI.
In what is now Britain's biggest financial mis-selling scandal, banks and building societies pushed PPI policies alongside loans and other credit deals, with the promise they would pay the loan if borrowers found themselves unable to work. But in many cases exclusions meant they could never make a claim.In what is now Britain's biggest financial mis-selling scandal, banks and building societies pushed PPI policies alongside loans and other credit deals, with the promise they would pay the loan if borrowers found themselves unable to work. But in many cases exclusions meant they could never make a claim.
Although financial firms have set aside more than £18bn to compensate borrowers, the ombudsman's figures reveal they are still rejecting valid complaints. The ombudsman received 266,000 new PPI complaints in the first half of the year and found in favour of the customer in three-quarters of those it settled during the six months. The service, which takes on complaints that have been rejected by financial firms, has more than 1,500 staff handling PPI cases.Although financial firms have set aside more than £18bn to compensate borrowers, the ombudsman's figures reveal they are still rejecting valid complaints. The ombudsman received 266,000 new PPI complaints in the first half of the year and found in favour of the customer in three-quarters of those it settled during the six months. The service, which takes on complaints that have been rejected by financial firms, has more than 1,500 staff handling PPI cases.
PPI mis-selling caused nearly 58,000 new complaints about Bank of Scotland to the ombudsman over the first half of 2013. Over this period it sided with the customer in 87% of settled cases, a rate beaten only by Bank of Scotland's sister company Lloyds TSB.PPI mis-selling caused nearly 58,000 new complaints about Bank of Scotland to the ombudsman over the first half of 2013. Over this period it sided with the customer in 87% of settled cases, a rate beaten only by Bank of Scotland's sister company Lloyds TSB.
Lloyds TSB was second for overall complaints, with just under 56,000 about PPI, and 90% of PPI complaints made against it were decided in favour of the customer.Lloyds TSB was second for overall complaints, with just under 56,000 about PPI, and 90% of PPI complaints made against it were decided in favour of the customer.
"Disappointingly we are still seeing cases where businesses are not following our longstanding approach to PPI, resulting in long waits and unnecessary delays for consumers," the chief ombudsman, Natalie Ceeney, said."Disappointingly we are still seeing cases where businesses are not following our longstanding approach to PPI, resulting in long waits and unnecessary delays for consumers," the chief ombudsman, Natalie Ceeney, said.
"We are seeing encouraging signs from some major businesses that are starting to recognise the value of getting things right for their customers – with an increased focus on sorting out problems and concerns as quickly as possible.""We are seeing encouraging signs from some major businesses that are starting to recognise the value of getting things right for their customers – with an increased focus on sorting out problems and concerns as quickly as possible."
Financial firms pay £550 for each case referred to the ombudsman, regardless of whether the complaint is upheld. This means Bank of Scotland faced a bill of almost £3.2m for cases referred in the first half of 2013, while Lloyds TSB cases will have added a further £3m.Financial firms pay £550 for each case referred to the ombudsman, regardless of whether the complaint is upheld. This means Bank of Scotland faced a bill of almost £3.2m for cases referred in the first half of 2013, while Lloyds TSB cases will have added a further £3m.
In February, Lloyds was fined £4.3m for delaying PPI compensation to 140,000 customers, and in June an undercover reporter found staff at a claims centre for the firm had been told to reject as many as possible.In February, Lloyds was fined £4.3m for delaying PPI compensation to 140,000 customers, and in June an undercover reporter found staff at a claims centre for the firm had been told to reject as many as possible.
Barclays was the second-placed banking group in the ombudsman's complaints league table with 44,223 complaints. The number of cases concerning the bank were up markedly on the same period of 2012, when 24,457 complaints were registered, but down 3% on the second half of the year.Barclays was the second-placed banking group in the ombudsman's complaints league table with 44,223 complaints. The number of cases concerning the bank were up markedly on the same period of 2012, when 24,457 complaints were registered, but down 3% on the second half of the year.
A spokesman for Lloyds Banking Group said: "We made a decision in the first half of the year to voluntarily take a number of cases that were with the [ombudsman] and pay customers to ensure they didn't experience unnecessary delays. This has had a significant impact on the [ombudsman] data, so we are confident that the change rate on PPI complaints will reduce significantly."A spokesman for Lloyds Banking Group said: "We made a decision in the first half of the year to voluntarily take a number of cases that were with the [ombudsman] and pay customers to ensure they didn't experience unnecessary delays. This has had a significant impact on the [ombudsman] data, so we are confident that the change rate on PPI complaints will reduce significantly."
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