The Financial Services Authority recently shamed three former Lloyds bosses for failing to act upon the mis selling of PPI or payment protection insurance. Lloyds is currently the biggest contributor to the UK PPI claims compensation package with £5.3 billion, almost half of the £13 billion total.
The FSA requested the CEOs to reveal the information they know in a recent press conference and how Lloyds became the biggest PPI mis seller.
Carol Sergeant, the ex-chief risk officer in Lloyds during the “insurance boom”, told the press that she knew how the company was selling the insurances without considering fairness for customers. The issue was raised at a board-level meeting during her term, which met no notice or action.
Ex-Lloyds Head of Retail, Helen Weir, explains that the insurance policy made up 14% of the company’s annual income. She claimed that the customers demanded to have PPI. However, consumer reports say that Lloyds “recommended” the insurance policy to all their customers, which led to many being mis sold an insurance policy from their company.
Phil Loney, ex-head of the insurance product development and implementation, admitted that Lloyds used PPI to earn more profit from customers regardless if they can make any use for the insurance.
However, questions about why the FSA withdrew its investigation probe from Lloyds during the 2005-2007 era remains a mystery. However, the FSA said the issue was “resolved” in 2008 after Lloyds helped some banks recover to save the country from the fiscal crisis.
Officially, according to the Financial Services Authority (FSA), only 10.8 million UK citizens have yet to make a claim for mis sold PPI. The situation is slowly coming to a close. The FSA’s establishment of the new claims guidelines in 2011 has allowed UK citizens to receive £1.9 billion in compensation for mis sold PPI. Today, the bank’s compensation package has reached £5 billion.
Experts estimate that in 2013, the entire PPI fiasco has been resolved given the faster and simpler PPI claims process. The FSA has called for banks to call upon customers who are potentially mis sold PPI. The consumer group Which? has also entered an agreement between banks and PPI providers to allow customers to make a claim directly to them, avoiding the lengthy lines in the Financial Ombudsman. The faster process increases the rate of resolving claims faster by 10% according to experts.
PPI or payment protection insurance is a useful insurance policy in itself. Many complain about PPI because of the manner it was mis sold. PPI provides 12 months of loan, mortgage or credit card repayments for customers who become ill, have an accident or get unemployed. These situations can last for weeks or months. Many customers mistook PPI as mortgage payment insurance (MPI) or income protection insurance (IPI) given the way their bank representatives explained the benefits of the insurance policy.
Today’s PPI claims methods and the compensation package ensure that the 10.8 million remaining claimants can make a claim without any hassle. However, experts at www.ppiclaimsco.org have warned that banks might not consider all legal and technical factors into consideration. You might still get a refund that is equivalent of a lump-sum repayment. It is highly advised that you seek consultation with claims handling companies before you proceed making a PPI claim on your own.