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.
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