Banks Push for PPI DeadlineAug 28, 2017
With Lloyds Banking Group this month announcing they are to put aside additional PPI provisions, it seems that the PPI scandal is set to stick around for some time yet.
However, despite the total PPI bill across all banks reaching £20 billion, there are rumours surrounding a revived proposal for a ‘PPI deadline’ which would potentially put an end to future complaints and customer compensation.
Lloyds bank last week announced that they are to add a further £1.8 billion to their already substantial PPI pot which has now reached just under £10 billion, the biggest sum of money set aside by any UK bank.
The total £20 billion reserved for customers who were mis-sold PPI by their bank, is in fact far bigger than the total bill for both mis-leading pension sales and mortgage endowments, which currently stand at £11.8 billion and £2.7 billion respectively.
And yet, news reports suggest that British banks are once again in talks with industry regulator, the Financial Conduct Authority (FCA) over a proposed deadline for mis-sold PPI claims. The FCA have refused to rule out setting a deadline, however Martin Wheatley, chief executive of the industry watchdog has said that “significant benefits” would have to be presented by banks for the FCA to consider the deadline:
“We are having a discussion and we have had that discussion many times over three years. Our question is: would there be significant consumer benefit to taking away consumer rights? It’s an equation.”
Meanwhile, as Natalie Ceeney, ex-chief ombudsman at the Financial Ombudsman Service (FOS) steps into her controversial new role at banking giant, HSBC, the FOS continues to receive exceptional volumes of PPI complaints. The impartial ombudsman service, where consumers can take grievances which remain unresolved, anticipate welcoming the new financial year with more than 400,000 unsettled complaints.
While PPI complaints are now beginning to decline, the figures remain vast. Between April and December last year, 326,977 new cases were taken on by the FOS, with around 6,000 complaints every week during the last quarter of 2013.
A PPI deadline may be the recommended solution from the banking industry, which in their opinion will help to draw a line under the scandal which has cost the industry billions in redress, and in fact encourage customers to make legitimate complaints through a raised awareness campaign.
However, from the consumer perspective let’s consider the fact that more than 400,000 complaints are likely remain unresolved at the FOS this April, not to mention, the colossal PPI bill, which continues to rise beyond original expectations as a result of banks’ submissions. The evidence implies that there is still much work to be done before banks can be absolutely certain that all those who were mis-led into paying thousands of pounds for useless or unwanted PPI, will receive what they rightly deserve before a ‘set in stone’ cut-off date.