Once again Jeff Prestridge of The Daily Mail has written about the scandal of PPI mis-selling.
In his article he argues:
"When Natalie Ceeney, head of the Financial Ombudsman Service, claimed a few weeks ago that some big banks were treating customers unfairly, she did not name names.
The issue related, inevitably, to payment protection insurance policies, which banks wrongly sold in their millions. Ceeney said the offending banks were not looking fairly at complainants’ cases on their individual merits but were ‘managing complaints down in line with the money set aside for compensation’.
Ceeney did not single anyone out, but I bet one bank she had in mind was Lloyds. Even now, of all the complaints that Lloyds rejects that are then pursued by the Ombudsman, 86 per cent are won by the consumer. In other words the bank rejects far too many cases when it ought to pay up.
That conclusion should be clear from the figures alone, but last week an undercover operation gave it fresh emphasis. A Times reporter posing as a complaints handler for Lloyds revealed the bank did indeed have a deliberate ploy of fobbing off complainants to avoid paying compensation.
Let us hope the new Financial Conduct Authority will step in and penalise Lloyds’ directors for this. It should do so swiftly, especially given the determination of its boss Martin Wheatley to get tough on financial services miscreants.
But let’s make sure enforcement does not stop there, because there is another culprit in this shabby process – Deloitte. When the accountancy giant is not doing its day job of helping firms avoid tax, it provides services including complaints handling, which it was doing for Lloyds in relation to PPI.
In fact, a lot of Deloitte’s work arises when banks such as Lloyds get into trouble with the watchdog and need an ‘independent’ hand to sort things out. Deloitte’s standing has been so high that it has even undertaken work for the Financial Ombudsman Service and the savers’ lifeboat, the Financial Services Compensation Scheme.
But now Deloitte appears as guilty as the miscreant banks. Regarding the Lloyds scandal, Deloitte says no more than its role was to ‘process PPI mis-selling complaints in accordance with the bank’s policies and procedures’.
As I read it, Deloitte is saying that fairness and good practice do not come into the equation. Complaints handing is not about putting things right, it’s about doing whatever Lloyds says. Justice and integrity be hanged.
Lloyds lost any remnants of its once high reputation years ago. Now it is only known as a customer-bashing millstone hanging round taxpayers’ necks.
Deloitte’s reputation, after these revelations, deserves to head in a similar direction. If ever there was a parasite profiting from the mess of bank mis-selling, it is Deloitte. It deserves to be in serious regulatory trouble."
Banks Still Short Changing Consumers
Lloyds bank have this week admitted to shortcomings in their PPI complaints handling following revelations by an undercover reporter from The Times newspaper.
According to reports published by the BBC, a reporter for the national newspaper went undercover as a graduate trainee at a Lloyds complaints centre in London, which was at the time operated by Deloitte. The complaints centre employed around 1,300 staff to assess PPI complaints on behalf of the bank.
According to the reports, staff at the Royal Mint Court centre in London were trained to “play the system” and were instructed to reject claims on the basis that most customers would give up on pursuing a claim following an initial rejection. The reports also claimed that staff were trained to effectively turn a blind eye to fraud, while the entire operation at Royal Mint Court was based on the assumption that Lloyds salesmen had never mis-sold PPI.
For the bank, the allegations by The Times are another black mark on a far from perfect complaints record. In February this year the bank was fined £4.3 million by the Financial Services Authority (FSA) for delayed PPI redress payments, while more than 40,000 complaints were logged by the Financial Ombudsman Service against the bank in the second half of 2012 alone.
Lloyds have responded to the accusations, admitting that there were shortcomings in their complaints handling which have been identified and dealt with independently. The bank also announced that the contract with Deloitte was terminated in May this year.
Lloyds may have acknowledged their wrongdoings, but it seems that their admission has been sparked only by The Times’ exposé. What’s more, as reported by This is Money, a Lloyds' spokesman, rejected the notion that customers have suffered any consequences as a result of their poor practice stating, “I don’t agree that anyone lost out as a result of what went on at Royal Mint Court. There was a 75% uphold rate from the centre and claims were constantly being checked”, a notion that is contradicted by The Times’ allegations and does little to work to rebuild trust for those customers let down by the bank.
Next week, MPs are set to debate the UK banking industry, with hopes that the parliamentary commission on banking standards will begin to improve standards within the industry, forcing banks to better serve the public and make amends for the likes of the Libor and PPI scandals.
As a claims management company specialising in reclaiming mis-sold PPI on behalf of customers, it is discouraging to hear about the latest development in Lloyds’ role in the scandal. However, the forthcoming Parliamentary commission on banking, is a highly anticipated movement which we hope will begin to prevent such failings and undo existing mis-trust between consumers and the industry.
Finally, a timely reminder arrived this week illustrating the very point that we have made here. One of our customers sent us their testimonial:
So the message is clear... and we will keep on fighting for consumers across the UK.
According to reports published by the BBC, a reporter for the national newspaper went undercover as a graduate trainee at a Lloyds complaints centre in London, which was at the time operated by Deloitte. The complaints centre employed around 1,300 staff to assess PPI complaints on behalf of the bank.
According to the reports, staff at the Royal Mint Court centre in London were trained to “play the system” and were instructed to reject claims on the basis that most customers would give up on pursuing a claim following an initial rejection. The reports also claimed that staff were trained to effectively turn a blind eye to fraud, while the entire operation at Royal Mint Court was based on the assumption that Lloyds salesmen had never mis-sold PPI.
For the bank, the allegations by The Times are another black mark on a far from perfect complaints record. In February this year the bank was fined £4.3 million by the Financial Services Authority (FSA) for delayed PPI redress payments, while more than 40,000 complaints were logged by the Financial Ombudsman Service against the bank in the second half of 2012 alone.
Lloyds have responded to the accusations, admitting that there were shortcomings in their complaints handling which have been identified and dealt with independently. The bank also announced that the contract with Deloitte was terminated in May this year.
Lloyds may have acknowledged their wrongdoings, but it seems that their admission has been sparked only by The Times’ exposé. What’s more, as reported by This is Money, a Lloyds' spokesman, rejected the notion that customers have suffered any consequences as a result of their poor practice stating, “I don’t agree that anyone lost out as a result of what went on at Royal Mint Court. There was a 75% uphold rate from the centre and claims were constantly being checked”, a notion that is contradicted by The Times’ allegations and does little to work to rebuild trust for those customers let down by the bank.
Next week, MPs are set to debate the UK banking industry, with hopes that the parliamentary commission on banking standards will begin to improve standards within the industry, forcing banks to better serve the public and make amends for the likes of the Libor and PPI scandals.
As a claims management company specialising in reclaiming mis-sold PPI on behalf of customers, it is discouraging to hear about the latest development in Lloyds’ role in the scandal. However, the forthcoming Parliamentary commission on banking, is a highly anticipated movement which we hope will begin to prevent such failings and undo existing mis-trust between consumers and the industry.
Finally, a timely reminder arrived this week illustrating the very point that we have made here. One of our customers sent us their testimonial:
So the message is clear... and we will keep on fighting for consumers across the UK.
Why banks should focus on service
With the likes of TSB and Tesco poised to enter the retail banking sector, Anthony Thomson, founder and former chairman of Metro Bank, outlines why marketers must put the needs of their customers before the needs of the bank.
When I first had the idea to launch a new bank in the UK, back in 2007, it came from a consumer insight. Every piece of market research I had seen said that traditional high street bank customers were dissatisfied with the service that they received from their bank.
There were (and are) one or two notable exceptions such as First Direct, that have excellent customer service ratings, but the vast majority acted as if the only thing that mattered to customers was price (or ‘rate’ in bank parlance).
I believed that there was an opportunity to create a "new" bank that focused on customer service and convenience.
At the time many people said the idea was crazy. They argued that the barriers to entry were very high and that customers expressed little interest in changing banks. In fact, if I had a pound for every time someone told me "you were more likely to get divorced than change banks" I wouldn't have needed to launch a bank.
However, whilst research did indeed indicate that less than 5% of customers switched banks, there were a number of pieces of research that suggested, between 25 and 40% would consider switching if there were a real alternative…
Metro Bank was about providing customers with that "real alternative". It opened its doors in July 2010 and over the past three years Almost 200,000 accounts have been opened in 18 Metro Bank stores (we call them stores as we think of ourselves as retailers.)
So why haven’t there been any new banks since then?
It is true that there were a number of barriers to entry at the time. Getting authorisation from (the then-regulator) the FSA was a long and difficult process. New banks were required to hold large amounts of capital and access to the payments system, which was owned by the big banks, was very difficult.
However, since then, most of those barriers have been reduced or even removed. The authorisation process has been massively simplified and shortened, the amount of capital new banks have to hold has been substantially reduced and the Treasury has announced that it will ensure new entrants have fair access to the payments systems.
Read the rest of this story at Marketing Magazine's website.
When I first had the idea to launch a new bank in the UK, back in 2007, it came from a consumer insight. Every piece of market research I had seen said that traditional high street bank customers were dissatisfied with the service that they received from their bank.
There were (and are) one or two notable exceptions such as First Direct, that have excellent customer service ratings, but the vast majority acted as if the only thing that mattered to customers was price (or ‘rate’ in bank parlance).
I believed that there was an opportunity to create a "new" bank that focused on customer service and convenience.
At the time many people said the idea was crazy. They argued that the barriers to entry were very high and that customers expressed little interest in changing banks. In fact, if I had a pound for every time someone told me "you were more likely to get divorced than change banks" I wouldn't have needed to launch a bank.
However, whilst research did indeed indicate that less than 5% of customers switched banks, there were a number of pieces of research that suggested, between 25 and 40% would consider switching if there were a real alternative…
Metro Bank was about providing customers with that "real alternative". It opened its doors in July 2010 and over the past three years Almost 200,000 accounts have been opened in 18 Metro Bank stores (we call them stores as we think of ourselves as retailers.)
So why haven’t there been any new banks since then?
It is true that there were a number of barriers to entry at the time. Getting authorisation from (the then-regulator) the FSA was a long and difficult process. New banks were required to hold large amounts of capital and access to the payments system, which was owned by the big banks, was very difficult.
However, since then, most of those barriers have been reduced or even removed. The authorisation process has been massively simplified and shortened, the amount of capital new banks have to hold has been substantially reduced and the Treasury has announced that it will ensure new entrants have fair access to the payments systems.
Read the rest of this story at Marketing Magazine's website.
Consumer Confidence in Banks Still Rock Bottom
As the Financial Ombudsman Service (FOS) last week released its latest annual report, figures show that complaints to the service have rocketed over the past year, leaving consumer confidence at rock bottom, according to the Chief Ombudsman.
The FOS deals with complaints that are unable to be resolved between consumers and financial businesses and offers a free and impartial service to consumers. Over the past year the FOS has witnessed an unprecedented rise in queries and complaints from disgruntled customers over a range of financial products and services.
During the last financial year (2012/2013) enquiries to the FOS reached daily highs of 7,000, while more than two million initial enquiries and complaints were made to the body throughout the course of the year. Of these initial customer enquiries, 1 in 4 turned into a formal dispute with a record 508,881 new cases recorded during the same time.
As the total amount set aside to compensate victims of the mis-selling of Payment Protection Insurance (PPI) surpasses £15 billion, it is little surprise that PPI complaints accounted for 74% of the total complaints to the FOS during the last financial year contributing toward the surge in grievances.
While a colossal 140% increase in PPI complaints was recorded by the FOS last year, there was also a 92% rise in all cases. Chief Ombudsman Natalie Ceeney has suggested that consumers are becoming increasingly savvy, and as a result are taking action to complain, with a “much stronger consumer voice”.
Meanwhile, banks have come under fire for their inadequacy in resolving PPI grievances. Talking to the Mail on Sunday Natalie Ceeney explained that the FOS are seeing evidence of some banks “tightening the criteria” under which they will agree to compensate customers who were mis-sold PPI, making it increasingly difficult for consumers to reclaim what is rightfully theirs.
Echoing the Ombudsman’s concerns that banks are narrowing the terms of redress, Richard Lloyd of the consumer group Which? added “These shocking figures show the banks are still letting their customers down and failing to help consumers with legitimate claims to get the compensation they’re rightly owed”. Based on the FOS figures, the magnitude of customer upset is widespread, and the notion that banks are in fact making it increasingly difficult to claim is discouraging to hear.
The British Bankers Association (BBA) has on the other hand defended criticisms from the FOS and consumer groups, instead maintaining that unscrupulous claims from Claims Management Companies (CMCs) are to blame for the lengthy process in compensating customers.
While we can only speak for ourselves as a CMC, we can confidently say that submitting erroneous claims to lenders would be counter-productive for both our customers and business. We aim to resolve complaints as quickly and efficiently as possible, and while there may be select companies who operate under bad practice, at We Fight Any Claim we are focussed on obtaining redress for our customers.
Based on the figures released by the FOS last week, it is clear that consumers are becoming more pro-active in tackling their grievances with banks. While select banks have responded to the PPI scandal by assigning entire departments to the process of redress, there are many who, according to the Ombudsman are restricting the conditions of compensation for customers. With the prospect of a frustrating and lengthy claims process, many consumers may find themselves discouraged from pursuing a claim, a worrying prospect we hope to see prevented by appropriate action from the banks.
The FOS deals with complaints that are unable to be resolved between consumers and financial businesses and offers a free and impartial service to consumers. Over the past year the FOS has witnessed an unprecedented rise in queries and complaints from disgruntled customers over a range of financial products and services.
During the last financial year (2012/2013) enquiries to the FOS reached daily highs of 7,000, while more than two million initial enquiries and complaints were made to the body throughout the course of the year. Of these initial customer enquiries, 1 in 4 turned into a formal dispute with a record 508,881 new cases recorded during the same time.
As the total amount set aside to compensate victims of the mis-selling of Payment Protection Insurance (PPI) surpasses £15 billion, it is little surprise that PPI complaints accounted for 74% of the total complaints to the FOS during the last financial year contributing toward the surge in grievances.
While a colossal 140% increase in PPI complaints was recorded by the FOS last year, there was also a 92% rise in all cases. Chief Ombudsman Natalie Ceeney has suggested that consumers are becoming increasingly savvy, and as a result are taking action to complain, with a “much stronger consumer voice”.
Meanwhile, banks have come under fire for their inadequacy in resolving PPI grievances. Talking to the Mail on Sunday Natalie Ceeney explained that the FOS are seeing evidence of some banks “tightening the criteria” under which they will agree to compensate customers who were mis-sold PPI, making it increasingly difficult for consumers to reclaim what is rightfully theirs.
Echoing the Ombudsman’s concerns that banks are narrowing the terms of redress, Richard Lloyd of the consumer group Which? added “These shocking figures show the banks are still letting their customers down and failing to help consumers with legitimate claims to get the compensation they’re rightly owed”. Based on the FOS figures, the magnitude of customer upset is widespread, and the notion that banks are in fact making it increasingly difficult to claim is discouraging to hear.
The British Bankers Association (BBA) has on the other hand defended criticisms from the FOS and consumer groups, instead maintaining that unscrupulous claims from Claims Management Companies (CMCs) are to blame for the lengthy process in compensating customers.
While we can only speak for ourselves as a CMC, we can confidently say that submitting erroneous claims to lenders would be counter-productive for both our customers and business. We aim to resolve complaints as quickly and efficiently as possible, and while there may be select companies who operate under bad practice, at We Fight Any Claim we are focussed on obtaining redress for our customers.
Based on the figures released by the FOS last week, it is clear that consumers are becoming more pro-active in tackling their grievances with banks. While select banks have responded to the PPI scandal by assigning entire departments to the process of redress, there are many who, according to the Ombudsman are restricting the conditions of compensation for customers. With the prospect of a frustrating and lengthy claims process, many consumers may find themselves discouraged from pursuing a claim, a worrying prospect we hope to see prevented by appropriate action from the banks.
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