Favouring The Consumer Banks Are At A Loss

Barclays, Lloyds and Santander having been the three most complained about banks

in Britain for the first half of 2011; and the majority of these complaints having cited PPI as the source of objection. It is no wonder that according to new figures released by the Financial Ombudsman Service (FOS), hundreds of thousands of people have won compensation for miss-sold payment protection insurance (PPI).

The insurance, designed to provide cover in case of illness or redundancy, was sold alongside financial products, often without customers' knowledge, and rarely paid out.

The FOS, which rules on complaints about the controversial insurance that have been rejected by the banks, has seen the number of cases it has become involved with climb to more than 3,000 in the last two months. Banks for the first six months of the year alone paying out 557m.

Lloyds, the biggest seller of PPI following its takeover of HBOS, setting aside 3.2bn to cover claims in May; while Barclays set aside 1bn and HSBC made provisions for 270m. The banks face bills of more than 5bn to compensate customers and cover the administration costs involved.

Complaints between January June: Released by the Financial Services Authority (FSA)

Barclays251,563

Lloyds TSB181,907

Santander168,888

Natwest147,109

Bank Of Scotland130,469

HSBC98,150

The increased number of claims often presented on behalf of a client by a Claims Management Company has caused banks to stupor, under pressure (see above figures) both literally and financially. High street banks are expected to hire up to 6,000 workers to handle the increased number of PPI complaints. The number of complains has risen so high that event the FOS may have to take on more staff.

The rising payouts for miss-sold payment protection insurance could prove a boon for not just consumers; but for the economy as a whole, by boosting consumer spending. Most PPI refunds take between 6 to 12 weeks to complete. At a time when the current economic climate may be biting at the heels of those, who are feeling through their purses and wallets for more dough, this may prove welcoming. Consumer Protection Services Ltd (CPS), has processed over 15,000 claims over its 4 years in the PPI Claims industry. Available statistics show that in August, CPS clients received ppi refunds of over 1,083,395 and 813,493 in September. This is an extra 3149 and 2684 respectively for each client before Christmas!

So, whether banks are having a headache or not; it is up to the consumer to claim back what was rightfully miss-sold and receive some much needed cash back in their pockets. If you are interested in finding out more about making a claim please call 01625 536777 10am to 8.30pm for help.

by: B. Emerson

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