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PPI – more twists and turns than a thriller movie …

Despite the very welcome climbdown by the major banks on the PPI mis-selling issue, iot seems that some may still be relying on the letter of the law to avoid paying out where possible.

The issue arises in relation to claims which have previously been lodged and rejected by the banks. The new rules state that the banks do not have to investigate such complaints. In those cases, the complainant then has the option to formally complain to the Financial Ombudsman Service and has 6 months to do so. Many complainants state that in these circumstances the banks stalled them and many didn’t get a complaint lodged within the 6 month timeframe, and these cases are the ones where there will be a degree of controversy.

Before giving any impression that all banks and financial institutions are adopting the above line, this will not necessarily be the case, but it does appear that Santander, RBS and NatWest will adopt the line of rejecting such claims. On the other hand, Lloyds Banking Group, which includes Halifax and Cheltenham & Gloucester and Barclays and HSBC, advise that customers should contact them about the issue.

Agency worker regulations

The Department for Business, Innovation and Skills has released guidance on the Agency Workers Regulations (AWR) which will come into force at the beginning of October this year. The most important aspect of the new rules is that agency workers will accrue similar employment law rights as permanent employees after a period of 12 weeks in line with the European Union Agency Workers Directive.

For more information, click here.

Massive provision made by Lloyds for for mis-selling PPI policies

Lloyds has set aside a provision of the massive sum of £3.2 billion as compensation for  mis-sold payment protection insurance (PPI). The move will now increase the growing calls for the other major lenders to take similar steps and follows the recent highly significant High Court decision which effectively obliges the banks to proactively assess all the policies sold and to actively contact any customers possibly mis-sold these types of policy.

However, Lloyds have not yet gone as far as the FSA rules, which were ultimately endorsed by the High Court, require. Those rules require the banks to contact all past purchasers of PPI, inviting them to lodge a claim if appropriate, whereas the Lloyds position does not go as far as “inviting” the customer to lodge a claim. To it’s credit, Lloyds has designated phone numbers for customers and will have a complaints procedure to complete online.

Those whose recent claims have been put on hold pending the outcome of the recent High Court case will be processed without any further prompting, she said.

Last year, the FSA estimated that if the UK’s banks contacted past customers, approximately 20% may respond,  which ultimately could result in claims worth a total of perhaps £3billion. Under the FSA rules, given the obligation on the banks and other PPI sellers to actively invite and later customers, the figure is likely to be considerably higher than £3billion.