Loophole in FSA rules could mean consumers miss out
by Luke Whitmore, 18th May 2011
The banks have found a new loophole in FSA rules to avoid paying
people back the money owed to them due to PPI mis-selling.
After the banks' loss in the court case last week, which saw
them obligated to abide by the Financial Services Authority's new
regulations on mis-sold Payment Protection Insurance reclaiming,
some financial institutions are now turning down consumers'
applications for reclaims because of rules which allow them to
disregard any complaint which has already been rejected.
If a complaint is rejected, consumers have the right to take
their case to the Financial Ombudsman Service - but it must be done
within six months. With approximately 70% of wronged customers
having never escalated their complaint to the ombudsman, many
people who had their original mis-sold PPI claim turned down by the
bank may never see the compensation they could be entitled to.
There are exceptions to this restriction, but they refer only to
extreme cases, including long-term sickness, being away from the
country or failure on the part of the bank to inform the customer
of their right to go to the ombudsman.
Many banks used underhanded tactics to discourage people from
pursuing their complaints, which means that there may be a large
number of people who have suffered from egregious PPI mis-selling
and yet stand no chance of refunds or compensation.
Santander has stated that they are unwilling to reassess any
previously-rejected complaints, with RBS and NatWest simply
promising to abide by FSA standards - which notably excludes any
obligation to take another look at cases which have already been
dismissed. Lloyds merely asks consumers to get in touch with them
directly, leaving it unclear as to whether or not they will be
addressing complaints which were originally disregarded.
But there is a bright side for customers of Barclays and HSBC,
who have said that they are happy to hear from customers who had a
PPI complaint rejected before, due to changes in the way they
evaluate these cases.
If you feel you were mis-sold a PPI policy, we can help you claim PPI compensation.
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