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.