Un-Welcome, the Importance of IP, FOS Levy, Bad Barclays and Lloyds getting better!

The blog had a week off - but back now with more stories! Its been a busy couple of weeks in PPI. I initially commented on Welcome's current predicament a few weeks ago. Welcome have been declared in default which would have meant that any claim against them for PPI compensation should now be made to the Financial Services Compensation Scheme (FSCS). The FSCS would normally look to pay out individual compensation claims on behalf of a business, once that business has been declared in default (ie, not able to pay claims made against it). The problem is that the FSCS intend to use any compensation to reduce the balance of the customer's loan account. This isnt unreasonable, as the customer benefits from being able to repay the loan earlier - but given most loans are refinanced regularly, the client will miss out on a cash settlement. This is likely to put customers off from claiming - especially when they are sent a long complicated FSCS application form directly to complete. Alan Lakey of Highclere Financial Services made comment about the important of Income Protection Plans and how more IFAs (and in my opinion, banks) should look to prioritise protecting the consumer before selling them packaged accounts, investments or other finance. There are some fantastic protection plans in the marketplace which can cover you for accident, sickness or unemployment for a specific amount every month until you return to work. It is important these policies arent tainted with the same brush as single premium PPI sold on loans and other finance. They have real benefits in difficult times and should be taken more seriously in these uncertain economic times. Unsurprisingly, the Ombudsman's levy has increased. Essentially, the FOS needs money to process claims and the sheer volume which it is presently dealing with means it needs a lot more to function properly. 30% of the levy is coming from banks, building societies and mortgage lenders, 37 per cent would be paid by general insurance intermediaries, and 12 per cent by general insurers. This seems to be a fairer spread across the industry to account for the increased levy and should allow the FOS to push ahead with its cases. Barclays has been flagged as Britain's most complained about bank with 276,315 complaints raised against it in the second half of 2010, according to the Financial Services Authority. The second worst offender was Santander with 195,475 complaints, taking the total number of grievances involving high street banks to more than a million or 5,750 per day. This is a welcomed change as Lloyds used to head the league table of complaint data with its appalling record! On the other hand, Lloyds, with their new chief executive, wants to cut complaints about the bank by 25%. This can only benefit the consumer and I welcome his enthusiasm - hopefully his target will be dramatically exceeded - Lloyds have certainly got a lot of work to do! If you want to make a claim about your PPI, visit www.ppireturn.co.uk to begin your case.