Banks Slammed For Dragging Their Heels On PPI Reclaim Payouts, Says PPI Reclaims Company
Banks are standing accused of deliberately dragging their heels over paying out the reclaims and compensation they owe to thousands of out-of-pocket victims of their PPI mis-selling practices, says PPI reclaims company Missoldppiclaims.info.
Earlier this month a number of banks revealed they were in the process of writing to 12 million customers to offer them refunds and compensation on the basis they are likely to have been mis-sold PPI in the past. However, while they have been praised for doing so, the praise has not been quite so forthcoming over the length of time they have been taking making the payments to victims of cases they have already ‘settled’. In some cases, victims have been promised large payouts within 21 days and six months later are still waiting.
Richard Lloyd, Which? Executive Director said: “It’s amazing after all this time what a shambles PPI still is. Yes, the Financial Services Authority has put out guidance, but still for way too many people there is no guarantee they will get their money quickly. Banks complain about the overwhelming volume, but they created the mess in the first place and then made it worse by putting complaints on hold while they took it to court last year.
"It beggars belief that they can’t write to people properly, accurately, personally and quickly and then get refunds to them. How come banks can so quickly and accurately bill us for overdraft charges? They are on our case like lightning if we owe them money, so why is it so difficult for them to get things sorted when they owe cash back to customers?”.
While the Financial Services Authority produced guidance on dealing with PPI reclaims, including taking eight or less to deal with the reclaims, it never specified how long they should take to make the refund payments.
A spokesperson for PPI Claims Company; Missoldppiclaims.info, said: “It seems to me that unless the Financial Services Authority put stringent guidance in at every stage of the PPI reclaim process that lenders must adhere to, the lenders are going to continue to make a mockery of the system.”
“Bottom line, lenders should not be allowed to keep people hanging like this for months on end and the FSA now needs to step in and stop this. It’s given lenders the benefit of the doubt and allowed them to set their own pace for paying reclaims and compensation, but I’m sure they never expected that pace to be that of a snail.”
The FSA claims that putting new rules in place would not help the situation and would take too long to bring in, so as a fall back it is to more closely define what is meant in the guidelines when it says banks must pay up promptly.
“The guidelines only stipulate that banks must pay promptly, but doesn’t go as far as explaining what promptly is,” continued the spokesperson. “However, generally speaking promptly is considered by the finance industry to be 28 days or less. The FSA says it is working closely with lenders to sort things out, but unfortunately I think unless it starts cracking the whip soon things will not improve. The lenders can only use the excuse of a backlog for so long, and let’s face it, that excuse only applies to the length of time it is taking to process a claim. The backlog has nothing to do with how long it takes to issue a refund because that is a very fast thing to do.”
“You have to wonder whether the banks are trying to hang on to the money for as long as possible into the next financial year so their accounts will look healthier for 2011/12,”concluded the spokesperson.