The big banks are considering whether to clawback bonuses paid to executives who oversaw retail operations when Payment Protection Insurance sales were at their height. As compensation to customers is expected to run into billions, banking bosses were able to take millions in bonuses during the years in which the mis-selling took place.
The head of Lloyds, Antonio Horta-Osorio said last week the bank’s remuneration committee would review to see if those clawbacks were appropriate. Furthermore, Brian Hartzer, head of RBS, said on Friday they would consider the clawbacks, as did HSBC and Barclays. The old Lloyds chief executive Eric Daniels and former retail boss Helen Weir may be targets for the clawbacks.
In the scheme of the mis-selling, the clawbacks will be tiny in comparison to the amount which is due to be paid back to customers. Clearly there is a desire to see the senior management held accountable for the mis-selling which occurred whilst they were at the banks. In practice, the banks may struggle to obtain those clawbacks legally, but im sure matters will become clearer over the next few weeks.
Further reports this week focused on the banks potentially exploiting a 'loophole' to get out of paying certain types of claim.
The reports suggest that banks are hiding behind rules which say they don’t have to investigate any complaint they have already rejected. A complainant should have 6 months to refer their complaint to the Financial Ombudsman Service should it have been rejected by the lender. Although the new FSA rules state banks should consider contacting customers who haven't complained, there are no such provisions for customers who have had a complaint rejected.
There are substantial numbers of complainants who have failed to appeal a rejection in good time and its a shame those customers did not seek guidance before during their claim. It is a fact that only 4-5% of complainants in person decide to appeal a rejection from their bank which has left thousands potentially out of pocket. I would always suggest that customers take adequate advice before making a complaint. The rules and processes can be daunting to those who are not used to the banks complaints procedures.
Finally, Yorkshire and Clydesdale Banks are making a £100m provision to cover compensation for the mis-selling of payment protection insurance (PPI). The banks are paying out considerably less than most of the other big UK banks.
Yorkshire and Clydesdale said their decision to make the £100m provision follows the announcement by the British Bankers’ Association that it does not intend to pursue the judicial review process. Chief executive Lynne Peacock said “As a bank we were not involved in the judicial review, but as the outcome of the BBA case is now clear it is prudent for us to provide against future PPI claims as other banks have done.
“Our assessment of £100m is based upon estimates and assumptions that continue to be uncertain, but we feel this is an appropriate amount to account for claims yet to be received and the probability of success of those claims.
The news is clearly to be welcomed by consumers who felt they were mis-sold PPI by the bank, the £100m provision will almost wipe out their £101m half year pre-tax profit.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk. Now has never been a better time to make a claim.
Monday, 23 May 2011
Monday, 16 May 2011
Current Account Fees, Concern at HSBC and FTSE Struggles
Unfortunately, despite the JR being decided clearly in the customer's favour, we are yet to see clear strategy from any of the banks on how they intend to deal with the backlog of complaints. Many of the big banks appear to still be locked in meetings about how they intend to deal with the cases. Furthermore, they appear to have yet to analyse their strategies fully about how they intend to deal with future claims.
We hope to begin seeing our clients claims settling very soon so we can get them the money they rightly deserve!
In the meantime, there are many more stories surfacing about account fees and charges. It is becoming much clearer now that because the banks have set aside so much money to potentially repay PPI to customers that they need to recoup that lost money elsewhere. It surely wont be too long before we are all paying monthly account fees to our banks as non-fee paying accounts reduce month by month.
A story surfaced about HSBC's liability to repay PPI to their customers. Although they had set aside some £250 million, they admit that the overall cost may be different as they take into account many 'other factors'. These factors include the nature and volume of customer complaints, the extent to which HSBC may be required to take action, and the facts and circumstances of each individual customer's case.
Accordingly, bosses admitted there was currently a "high degree of uncertainty" around the ultimate costs of dealing with the matters.
Finally, the FTSE took a small tumble as a result of the banks' confirmation of their PPI liabilities. This was to be expected as the nations biggest institutions forecast poor results for the coming years as a result of PPI compensation.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
We hope to begin seeing our clients claims settling very soon so we can get them the money they rightly deserve!
In the meantime, there are many more stories surfacing about account fees and charges. It is becoming much clearer now that because the banks have set aside so much money to potentially repay PPI to customers that they need to recoup that lost money elsewhere. It surely wont be too long before we are all paying monthly account fees to our banks as non-fee paying accounts reduce month by month.
A story surfaced about HSBC's liability to repay PPI to their customers. Although they had set aside some £250 million, they admit that the overall cost may be different as they take into account many 'other factors'. These factors include the nature and volume of customer complaints, the extent to which HSBC may be required to take action, and the facts and circumstances of each individual customer's case.
Accordingly, bosses admitted there was currently a "high degree of uncertainty" around the ultimate costs of dealing with the matters.
Finally, the FTSE took a small tumble as a result of the banks' confirmation of their PPI liabilities. This was to be expected as the nations biggest institutions forecast poor results for the coming years as a result of PPI compensation.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
Tuesday, 10 May 2011
Judicial Review Over, FSCS Targets Insurers and Banks Recoup Losses
Millions of people are now due to receive up to £9 billion in compensation as the banks decided to surrender their option to appeal Judge Ouseley's High Court decision against them. This means that all the banks must now adopt the provisions in the FSA's Policy Statement and begin reviewing cases and paying out compensation to customers.
The BBA released a statement yesterday confirming they didnt intend to appeal the Judicial Review. As a consequence, there has been some significant coverage in the press concerning the banks liability for PPI complaints. Lloyds TSB, by far, has the largest liability, suggesting it will need to pay around £3.2 billion in compensation to aggrieved customers with RBS at £850 million, HSBC at £270 million and Barclays at £1 billion.
Just how the banks intend to clear the huge backlog of claims is yet to be announced, but we are beginning to see some cases with FOS being upheld in the customer's favour already. The advice is to ensure you make your claim without delay!
In other news, the FSCS has suggested it intends to pursue insurers involved in the mis-selling of payment protection insurance. Historically, cases have always been dealt with against the party who provided the advice to take out the insurance policy. But the FSCS would like to begin scoping out the possibility of approaching insurers directly as they attempt to establish a common law duty that the seller of the policy was an agent of the insurer.
This will assist smaller IFAs and intermediaries by putting a percentage of the FSCS levy onto the shoulders of the big insurance companies. The idea has similar connotations to the Keydata saga between the FSCS and Norwich and Peterborough Building Society.
We have always agreed that some of the burden (especially loans sold by non-GISC members pre-05) be analysed for potential liability against the insurer and hope this will go some way to allow this to happen.
Following on from a recent article, there has been renewed analysis concerning how the banks intend to recoup losses from PPI compensation. It therefore has come as no shock to see credit card companies are charging the highest rates for 13 years. These stealth increases across the banking sector are fuelling the huge deficit made by the ban of PPI and subsequent funds to compensate customers. However, at least the fees and charges are becoming clearer. For example, customers may feel happier paying a monthly account charge for clear benefits rather than funding an unnecessary insurance policy. Im sure the banks will continue to find new ways to make money as time passes.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
The BBA released a statement yesterday confirming they didnt intend to appeal the Judicial Review. As a consequence, there has been some significant coverage in the press concerning the banks liability for PPI complaints. Lloyds TSB, by far, has the largest liability, suggesting it will need to pay around £3.2 billion in compensation to aggrieved customers with RBS at £850 million, HSBC at £270 million and Barclays at £1 billion.
Just how the banks intend to clear the huge backlog of claims is yet to be announced, but we are beginning to see some cases with FOS being upheld in the customer's favour already. The advice is to ensure you make your claim without delay!
In other news, the FSCS has suggested it intends to pursue insurers involved in the mis-selling of payment protection insurance. Historically, cases have always been dealt with against the party who provided the advice to take out the insurance policy. But the FSCS would like to begin scoping out the possibility of approaching insurers directly as they attempt to establish a common law duty that the seller of the policy was an agent of the insurer.
This will assist smaller IFAs and intermediaries by putting a percentage of the FSCS levy onto the shoulders of the big insurance companies. The idea has similar connotations to the Keydata saga between the FSCS and Norwich and Peterborough Building Society.
We have always agreed that some of the burden (especially loans sold by non-GISC members pre-05) be analysed for potential liability against the insurer and hope this will go some way to allow this to happen.
Following on from a recent article, there has been renewed analysis concerning how the banks intend to recoup losses from PPI compensation. It therefore has come as no shock to see credit card companies are charging the highest rates for 13 years. These stealth increases across the banking sector are fuelling the huge deficit made by the ban of PPI and subsequent funds to compensate customers. However, at least the fees and charges are becoming clearer. For example, customers may feel happier paying a monthly account charge for clear benefits rather than funding an unnecessary insurance policy. Im sure the banks will continue to find new ways to make money as time passes.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
Thursday, 5 May 2011
Lloyds - Judicial Review U Turn
Reports are surfacing suggesting Lloyds do not intend to participate in the Judicial Review action with the British Banking Association.
This is a massive U-turn from their position in October 2010 when they made positive declarations that they would not be processing complaints until the Judicial Review was decided.
Although, Judge Ouseley had found in favour of the FSA / FOS on the 20th April, the BBA and its members were still considering whether to appeal the decision. They have until the 10th May to do so, but this new stance from Lloyds may be a decisive indicator of what the banking industry intend to do.
Mr Horta-Osório (the new chief exec at Lloyds) has made it clear that they no longer intended to participate in the industry-wide action. "We will not be participating in the BBA review,". He went on to say that "It is the sensible, prudent and right thing to do, we believe it draws a line under this issue,". He added it provided "certainty" for customers and was "in the long-term stability" for the business. The statement goes a long way to try to position Lloyds well away from its previous mandate and will only benefit consumers.
It will be interesting to see whether this statement affects the rest of the industry, but this goes some way to allowing the victims of PPI mis-selling to finally recoup their losses.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
This is a massive U-turn from their position in October 2010 when they made positive declarations that they would not be processing complaints until the Judicial Review was decided.
Although, Judge Ouseley had found in favour of the FSA / FOS on the 20th April, the BBA and its members were still considering whether to appeal the decision. They have until the 10th May to do so, but this new stance from Lloyds may be a decisive indicator of what the banking industry intend to do.
Mr Horta-Osório (the new chief exec at Lloyds) has made it clear that they no longer intended to participate in the industry-wide action. "We will not be participating in the BBA review,". He went on to say that "It is the sensible, prudent and right thing to do, we believe it draws a line under this issue,". He added it provided "certainty" for customers and was "in the long-term stability" for the business. The statement goes a long way to try to position Lloyds well away from its previous mandate and will only benefit consumers.
It will be interesting to see whether this statement affects the rest of the industry, but this goes some way to allowing the victims of PPI mis-selling to finally recoup their losses.
If you think you have been mis-sold PPI, please get in touch with us at www.ppireturn.co.uk
Tuesday, 3 May 2011
Banks Ponder Appeal, FSA Statement and No More Free Accounts
Following the release of the judgment in the Judicial Review action against the FSA, banks are clearly holding meetings with their lawyers to decide whether to carry on their court fight.
The British Bankers' Association (BBA) only has until 10th May to ask for permission to appeal after the High Court rejected its claim that new rules for handling complaints about the mis-selling of PPI were unlawful.
They are under huge pressure from the Financial Ombudsman Service FOS not to delay the progression of the cases any longer. The Chief Ombudsman, Natalie Ceeney, says 'fighting on will damage the banks' reputations further'. Miss Ceeney went on to say 'Now we have a clear-cut ruling, we need to work together to resolve these complaints as quickly as possible. It will greatly benefit all of our reputations to do so.'
The FSA also released a statement stating the decision "signals the end of years of poor payment protection insurance complaint handling" and would "trigger a dramatic improvement in the way customers are treated when complaining". The FSA went on to say that their "primary aim has always been to get proper redress, once and for all for those with genuine complaints."
They reiterated they had not put a waiver in place to allow banks not to progress PPI complaints and warned banks they would suffer enforcement action if they failed to investigate complaints fully.
The outcome as it stands is that the Judge found that the Ombudsman has an extremely broad discretion when assessing consumer complaints; firms must take account of the FSA's Principles for Business in addition to the specific conduct rules in their complaint handling processes and firms will need to pay very close attention to the Principles when assessing a sale of regulated products even where there are specific rules which apply. As such, it is clear that although the Judge took particular note of the provision that the Principles could not give rise to a cause of action in a Court, the Principles still had an overarching role in the regulation of banks and so should be used as a factor in the determination of complaints.
Whatever happens on or before the 10th May, at least the matter will be progressed and we will be able to see some movement.
Some more reports have been surfacing signalling the end of free banking and current accounts charging customers a fee now outnumber those that do not. There are now 58 free accounts open to customers, down from 65 in 2009.
Meanwhile, providers have increased the range of packaged accounts that levy a monthly fee in return for additional benefits such as free travel insurance. Furthermore, the prices charged for those accounts are also rising. In 2006, the average packaged account cost just over £10 per month. Now customers pay more than £15 on average – and a range of providers, including Barclays, NatWest and RBS, charge even more.
In 2008, the Office of Fair Trading estimated that banks made on average £152 per current account as a result of interest, fees and charges. This more than covers the cost of so called 'free banking' for its customers. But lost revenues from other areas need to be recouped and so we may start finding ourselves stuck with one or two banks who offer these free accounts, limiting our choice across the marketplace.
The British Bankers' Association (BBA) only has until 10th May to ask for permission to appeal after the High Court rejected its claim that new rules for handling complaints about the mis-selling of PPI were unlawful.
They are under huge pressure from the Financial Ombudsman Service FOS not to delay the progression of the cases any longer. The Chief Ombudsman, Natalie Ceeney, says 'fighting on will damage the banks' reputations further'. Miss Ceeney went on to say 'Now we have a clear-cut ruling, we need to work together to resolve these complaints as quickly as possible. It will greatly benefit all of our reputations to do so.'
The FSA also released a statement stating the decision "signals the end of years of poor payment protection insurance complaint handling" and would "trigger a dramatic improvement in the way customers are treated when complaining". The FSA went on to say that their "primary aim has always been to get proper redress, once and for all for those with genuine complaints."
They reiterated they had not put a waiver in place to allow banks not to progress PPI complaints and warned banks they would suffer enforcement action if they failed to investigate complaints fully.
The outcome as it stands is that the Judge found that the Ombudsman has an extremely broad discretion when assessing consumer complaints; firms must take account of the FSA's Principles for Business in addition to the specific conduct rules in their complaint handling processes and firms will need to pay very close attention to the Principles when assessing a sale of regulated products even where there are specific rules which apply. As such, it is clear that although the Judge took particular note of the provision that the Principles could not give rise to a cause of action in a Court, the Principles still had an overarching role in the regulation of banks and so should be used as a factor in the determination of complaints.
Whatever happens on or before the 10th May, at least the matter will be progressed and we will be able to see some movement.
Some more reports have been surfacing signalling the end of free banking and current accounts charging customers a fee now outnumber those that do not. There are now 58 free accounts open to customers, down from 65 in 2009.
Meanwhile, providers have increased the range of packaged accounts that levy a monthly fee in return for additional benefits such as free travel insurance. Furthermore, the prices charged for those accounts are also rising. In 2006, the average packaged account cost just over £10 per month. Now customers pay more than £15 on average – and a range of providers, including Barclays, NatWest and RBS, charge even more.
In 2008, the Office of Fair Trading estimated that banks made on average £152 per current account as a result of interest, fees and charges. This more than covers the cost of so called 'free banking' for its customers. But lost revenues from other areas need to be recouped and so we may start finding ourselves stuck with one or two banks who offer these free accounts, limiting our choice across the marketplace.
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