Bank could face tough action over loan insurance debacle
by Russell Shackleford, 31st August
2011
High-street bank HSBC is likely to face censure from the
Financial Services Authority after failing to deal with their
backlog of mis-sold PPI complaints by the agreed deadline.
Complaints over the controversial loan insurance which was
mis-sold to millions of customers had built up during a judicial
review in which the banks took legal action against the FSA over
new PPI regulations which were to be retroactively applied. The FSA
extended its usual time limit on responding to these complaints due
to the number of cases which would have to be addressed.
Ordinarily a financial institution would have no more than eight
weeks to respond to a complaint, but the FSA relaxed the guidelines
and gave the banks until midnight yesterday to handle the mis-sold
PPI cases. However, HSBC was forced to admit prior to the deadline
that they would not be able to make it.
While HSBC has apparently contacted all of the customers who
were mis-sold PPI, it has not informed them as to how much
compensation they will be entitled to, thereby failing in the eyes
of the FSA.
However, a spokesman for HSBC claimed that the FSA was
"supportive of our approach", stating that "we have been in weekly
contact with the FSA over our processing of customer PPI
complaints". This is despite the fact that the FSA has previously
stated that it will take severe action against those who do not
meet the standards of customer service they have set.
Other banks involved in the scandal, such as Barclays, RBS and
Lloyds Banking Group, have reported that they have met the
requirements specified by the FSA within the time allotted.
The executive director of Which? magazine, Richard Lloyd, said
"There's no excuse for banks not to have cleared the backlog of
complaints caused by the judicial review. Any firms that have not
met the 31 August deadline should face tough enforcement
action."
If you have been mis-sold PPI and have not been contacted by
your bank, we can help you make a PPI claim today.
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