Lenders Confess They Have Failed To Meet Their Own 28-Day PPI Compensation Payment Deadlines, Says PPI Claims Company Simple Financial Solutions
February 21, 2012 Business News(PRLEAP.COM) Victims of mis-sold PPI insurance have had their worst fears confirmed after major lenders and banks have admitted they have been failing to meet the 28 day deadline for paying PPI compensation required, says PPI Claims Company Simple Financial Solutions.
The gentleman's agreement made between Royal Bank of Scotland/NatWest, Lloyds TSB, Barclaycard and Firstplus has now been broken with Lloyd's admitting they have the worst delays of all of them. Even when compensation claims are agreed, it can be months before payments are made to customers.
A spokesman from Lloyd's TSB said about the delays: "We are processing all PPI compensation payments within a reasonable turnaround time, however we have encountered a one-off processing issue which has delayed payments for a group of customers with a Lloyds TSB loan. We are looking to resolve this as a priority and have dedicated resource working on this to clear the backlog."
RBS/Natwest is also having problems, although at worst it claims its customers are only two weeks behind schedule. An RBS spokesperson said: 'We are working carefully and quickly through all responses received, and are sorry for any delay this may have caused.
The rest of the major lenders, including Barclays, Bank of Scotland, Halifax, HSBC and Santander say they are meeting the 28-day deadline.
A spokesperson for PPI Reclaims Company, Simple Financial Solutions, said: "It's worrying when lenders and banks fail to meet their own self-imposed deadlines. The customers of Lloyd's TSB and RBS/Natwest have already had to wait a long time to get their claims heard, dealt with and confirmation of an compensation received. Telling them they are successful with their claim and then failing to pay out the compensation for months on end is a massive slap in the face for these customers, some of whom have been waiting for over a year for their case to be heard in the first place."
It is almost certain that a proportion of the complaints that are backlogged come from earlier in 2011 while lenders awaited the outcome of a court case, but when that collapsed the lenders had until August 31st to clear their existing case load. Around £216 million was paid out at that point, with lenders still looking at close to £5bn in total refunds and compensation claims to fulfil before the problem is completely sorted.
"It is interesting to speculate about the reasons why these two lenders are so far behind compared to other lenders of a comparable, if not bigger, size. You have to hope the size of the backlog is not indicative of the scale of mis-selling committed by their staff in the past, or perhaps that they've had a blanket policy of not dealing with the claims in the first place in an effort to put off claimants."
There is no information about all the banks and lenders that failed to meet the deadlines, prompting anger among consumer groups. This is especially in light of a Freedom of Information Act by consumer charity Which? that was rejected by the Financial Services Authority on the basis that 'naming and shaming' could damage the businesses concerned and prevent future 'open and candid' discussions with the financial industry.
"We were hugely disappointed that the FSA is more concerned with protecting the brands of firms who have systematically mis-sold PPI than with telling customers what's going on. PPI has been mis-sold on an industrial scale, and banks must be held to account for their actions," said Richard Lloyd, Which? Executive Director.