More Musings on Mis-Selling...

Recent events suggest that the financial system in general, and the banking system in particular, still have serious issues to resolve before we, the general public, can be confident that all the outstanding misselling issues have been resolved; that the biggest banks have dealt adequately with their misselling liabilities and that they are properly capitalised and ethically run, complying with their duty to their customers and to the regulator to treat their customers fairly.

Let us start with the alleged missale of interest rate hedges and the more exotic variants, such as interest rate caps and collars. These products are intended to protect the customer against interest rate risk. In principle, therefore, they can meet customers’ needs as they provide greater certainty over future loan repayments. However, these products can also be very complex and, therefore, susceptible to misselling.

The full article can be read over on Money Marketing.

Rogue PPI Texts Come Under Scrutiny

The Advertising Standards Authority (ASA) has raised fears about the activities of a claims management company while upholding complaints against it relating to text messages about compensation.

The ASA said Data Supplier, based in India, had not responded to its enquiries about the texts which were found to have breached its code.

One of the messages, judged to be in breach of the rules, said: "We have been trying to contact you regarding your PPI (payment protection insurance) Claim, we now have details of how much you are due, just reply CONFIRM and we will call you back".

The second text said: "Our records indicate you may be entitled to £3750 for the accident you had. To claim for free just reply CLAIM to this msg. To stop text STOP."

Three complainants, two of whom received the first text and one who received the second, challenged whether they were misleading and could be substantiated, because they had not recently had an accident or did not believe that they were eligible to reclaim PPI payments, and suggested that the texts breached the advertising code because they were unsolicited.

For more on this story visit the Sky News website.

HSBC Fined £1.2bn

HSBC has confirmed it is to pay US authorities $1.9bn (£1.2bn) in a settlement over money laundering, the largest paid in such a case.

A US Senate investigation said the UK-based bank had been a conduit for "drug kingpins and rogue nations".

Money laundering is the process of disguising the proceeds of crime so that the money cannot be linked to the wrongdoing.

HSBC admitted having poor money laundering controls and apologised.

"We accept responsibility for our past mistakes," said HSBC group chief executive Stuart Gulliver in a statement.

For more on this story go to the BBC News website.

WFAC Mo Bro's Bid Farewell to Facial Fuzz

As the global charity campaign Movember drew to a close last week, We Fight Any Claim (WFAC) staff said a fond farewell to their charitable facial hair after successfully raising a huge sum of money for the charity.

Nine members of staff took part in the Movember challenge by growing moustaches throughout November, raising £1,174 for Men’s Health Charities. The nine members of staff to successfully complete the Movember challenge were Craig Griffiths, Simon Evans, Sam Morgan, Luke Johns, Gareth Haycock, Danny Read, Howard Davies, Kyle Roberts and Rob Stephens. Staff based at the Cwmbran call centre, supported those taking part in Movember by donating their weekly Dress Down Friday contribution to Movember.

For more on this have a look over on our media page on our website.

Yahoo Search Terms Highlight PPI Concerns

The most asked questions on Yahoo! UK search in 2012 reveal an insecure but practically minded populace - who may not have been aware of the meaning of the word pleb until this year.
The top question asked by users of the Yahoo search engine in 2012 was "How to make money", followed by "who unfollowed me?" from nervous Twitter users eager to find out who had stopped following them on the social network.

More prosaic concerns such as "When do the clocks go back?" (fourth), "How to write a CV" (fifth) and "When is Easter?" (sixth) also appeared in the top ten.
Perennial challenges - losing weight (third) - mixed with more modern questions - "What is my IP address?" - and financial concern of the PPI mis-selling scandal by high street banks brought "How to claim PPI yourself" into tenth place.

The full list can be seen here.

Why Protection Insurance is Important

Financial protection has been given a bad name by the poor value offered by payment protection insurance. But for many people, the reassurance that cover brings cannot be overestimated.

Alan Lakey, a leading financial protection expert, says too many people are overlooking cover in favour of long-term savings or paying for school fees and holidays.

They expose themselves to potential future financial upheaval, warns Lakey, founder of Highclere Financial Services in Hemel Hempstead, Hertfordshire. ‘Whether people are saving into a pension or Isa, both vehicles rely on continuing income to keep feeding them,’ he says.

‘If income ceases, so do the savings. So the first step is to ensure that in the event of ill health or accident the flow of income can continue.In effect, protection planning is the foundation of all other financial planning and without sound foundations the aspirations may crash down like a dodgy building.’


Read more here.

Unrest amongst Bankers

The banking industry's main lobbying group is facing growing unrest from some of its largest members over its administrative costs and strategy as it attempts to chart a new course under its recently-appointed chief executive.

Senior bankers say they are alarmed by proposals from the British Bankers' Association (BBA) for the biggest high street banks such as Lloyds Banking Group and Royal Bank of Scotland to stomach a sharp increase in the membership fees they pay.

More on this story over at Sky News.

More Capital Needed for UK Banks

Major UK banks may need to raise more capital as protection against possible future losses, the Bank of England's Financial Policy Committee has said.

Bank governor Sir Mervyn King said there were "good reasons" to think current capital ratios did not give an accurate picture of financial health.

His comments came as he presented the Bank's Financial Stability Report.

The report suggested that the 'Big Four' UK banks need £5bn-£35bn of new capital.

The full story, reported on BBC news, also goes on to mention that adequate capital levels are also needed in the face of rising costs related to banking scandals.


This year, HSBC and Barclays were respectively hit by penalties over money-laundering and the alleged rigging of the Libor rate.

Meanwhile the banks have set aside billions of pounds to cover claims for payment protection insurance (PPI) mis-selling.

"In recent years, UK banks have also underestimated and underprovisioned for costs for conduct redress, notably for payment protection insurance (PPI) mis-selling," the stability report said.

Don't Water Down Vickers

Shadow chancellor Ed Balls has warned the Government it risks losing Labour support for banking reforms if it waters down Sir John Vickers’ recommendations.

Speaking to the FT, Balls said he did not believe the chancellor was implementing the full recommendations of Vickers’ Independent Banking Commission report.

For fuller details of this story, which has arisen out of the various banking scandals such as mis-sold PPI read  here.

More Staff for FOS to deal with PPI Claims

The Financial Ombudsman Service has increased its staff numbers by 25 per cent over the last year under the weight of payment protection insurance mis selling with plans to keep hiring if complaints continue at current levels.

In the last year it has recruited 500 more staff to deal exclusively with PPI claims, bringing its total workforce to 2,500.

The full article can been seen over at Money Marketing

PPI reserves estimated to hit £16 billion

TOTAL PPI compensation payouts are likely to hit £16bn, according to new estimates out today, providing a £10bn boost to consumer spending but crippling shareholders and allegedly hitting banks’ ability to lend to firms and individuals.

The PPI payouts are reaching such a scale that they are being described as a bank windfall tax in all but name.....

For the full story read here.

Why We Never Cold Call

It is difficult to escape the words “mis-sold Payment Protection Insurance (PPI)” on a day to day basis as Britain’s TV and Radio channels become increasingly oversubscribed with adverts and news coverage of the banking scandal. Of course, it’s not just our media channels feeding us with reminders that we can reclaim mis-sold PPI, you’re more than likely to find a text message waiting for you on your phone alerting you to the thousands of pounds  your bank are so eager to compensate you with.

As ‘cold ‘calling and unsolicited text messaging appear increasingly common, the phrase mis-sold PPI now evokes frustration for customers who have been targeted by unwanted marketing calls and texts from companies they have never requested to be contacted by.

Following the Information Commissioner’s Office (ICO) report which last week raised concerns over WFAC’s telemarketing, we want to reassure consumers that we do not ‘cold’ call or text customers, and will only ever contact customers who have indicated that they may have had PPI and are happy to receive marketing calls.

It is important that as a business we advertise our services to customers, and this does involve calling customers who have indicated an interest in our company, either directly through our website or via a third party. We believe that the majority of complaints which have prompted the ICO’s concern are from those people who may have forgotten they had previously opted in to receiving contact from our company. We will always remove any customers from our database who inform us that they no longer wish to be contacted by us.

It is unfortunate that not all organisations wish to comply with mandatory rules and regulations set in place to protect consumers, so it is no surprise that consumers are becoming increasingly aggravated by the sheer volume of unsolicited marketing calls and text messages they are receiving. While WFAC can confidently testify that we do not ‘cold’ call or send unsolicited text messages, there are many Claims Management Companies (CMCs) who bring disrepute to the legitimate claims management industry by employing unlawful marketing practices.

At WFAC we believe we provide an excellent level of customer service, and have successfully claimed millions of pounds of compensation for our customers. We sincerely hope that any customers who believe they were mis-sold PPI and are yet to make a claim will not be deterred by those CMCs who continue to cause customer upset through unsolicited marketing calls and text messages.

Banks Face Criticism from FOS over PPI Scandal

There was a brief sense of early festive cheer for Britain’s hard pressed consumers recently, as more of the major High Street Banks announced further provisions are to be set aside to compensate customers who were mis-sold PPI.

Last week, the provisions in the UK topped £12 billion, with significant increases announced by Lloyds, RBS, HSBC and Barclays. With banks making appropriate provisions for refunding customers, why is it that the banks have come under further criticism from the Financial Ombudsman Service (FOS)?

The FOS, who recently received their 500,000th complaint regarding PPI have criticised UK banks for their part in the handling of PPI complaints. With the provisions reserved for compensating customers continuing to climb, alongside a record number of complaints to the FOS it is clear that many customers are still seeking compensation from their lender. The FOS have found that despite banks recognising a demand for compensation, many legitimate cases are being dismissed, as highlighted by Natalie Ceeney, Chief Executive of the FOS, ‘In a quarter of cases where banks said customers didn't have PPI, they did’.

In contrast Lloyds bank have argued that half of complaints they receive are ‘duplicates or dubious’, which the bank claim are accountable for slowing the process in which customers are receiving compensation. The FOS have quickly rejected this statement pointing out that only 3.5% of their complaints are erroneous.

While the FOS have highlighted the apparent failings of the banks in compensating customers, and many customers still await a refund from their lender, there are also success stories showing  that making a complaint against your lender may in fact be worthwhile. So far it is estimated that only one in ten people who were potentially mis-sold PPI have claimed back compensation, with seven in ten cases referred to the FOS being ruled in the consumers favour. It has also been reported that UK consumers are receiving £347 a second from lenders who mis-sold PPI to their customers with around £30 million a day being paid out to customers.

So while the banks at the centre of the scandal are accused of dragging their heels, it is important that consumers across the UK maintain their efforts in reclaiming PPI, despite the potential obstacles they may face in claiming compensation. There is after all, billions of pounds set aside by banks, waiting to be refunded to customers, and many have already been successful. Just last week it was revealed that a British woman won £140,000 compensation from her lender who was mis-sold her PPI 20 years ago. We therefore remind consumers to continue their efforts in claiming back PPI, and hope that the banks who have prepared financially to refund consumers will take the next appropriate steps in ensuring their customers are compensated and that this scandal will never be repeated.