Mis-sold loan insurance cases through the roof
by Luke Whitmore, 1st September 2011
RBS and NatWest have seen an increase in the number of
complaints made by customers over mis-sold PPI.
PPI, or Payment Protection Insurance, has caused complaints at
NatWest to increase by 24% over the first six months of the year,
reaching a total of 147,109, while RBS saw a rise of 27% to 68,414.
PPI cases comprised 31% of all complaints received by NatWest and
47% of all complaints received by RBS.
The number of customers dissatisfied over their PPI policies is
due to the widespread mis-selling of PPI by lending institutions.
PPI is a form of loan insurance which is intended to pay out if the
policyholder should suffer a loss of income, rendering them unable
to continue paying back their loan, but many found that the
policies they were offered turned out to be unsuited to their
needs, leaving a vast percentage of them paying for a useless
insurance policy.
Other banks have seen similar numbers of complaints on the
issue, with Barclays declaring that they had been informed about
73,000 potentially mis-sold PPI policies in the first half of 2011,
and that they anticipated this number to continue rising as more
consumers became aware of the loan insurance scandal. Lloyds had
also seen their number increase to 202,384, the majority of which
consisted of mis-sold PPI complaints.
While not all complaints from customers are necessarily valid,
and therefore not every complainant will be receiving a
compensation payout for mis-sold PPI, the rise in claims gives some
idea of the scale of the problem, in addition to the fact that the
banks have collectively set aside billions of pounds to cover the
amount of recompense they expect to have to grant to wronged
customers.
The Financial Services Authority has also stated that 65% of
their workload now involves challenging PPI complaints which were
rejected by the banks.
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010