October 15th, 2012
From the beginning of the third quarter of the year, Financial Services Authority managing director Martin Wheatley continues his crackdown on banks and financial institutions blamed responsible for mis selling PPI. The controversial insurance policy was hugely reported by customers as being mis sold by the financial advisers through “professional advice”
Lloyds recently fired thousands of “bonus chasers”, which they call financial advisers looking to raise profit while compromising customer sales fairness, in an attempt to lessen the load of their financial fiasco regarding PPI. Lloyds was reported by the Financial Ombudsman to have at least 22,000 claims just last September. For six month, the company has gained approximately 400,000 claims.
The FSA found out that many banks in the UK employ the same incentives system that “wrongly motivated” financial advisers that never ensured a better deal for customers, says Wheatley. He, with the approval of FSA Chairman Adair Turner, will establish the Financial Conduct Authority to assess the banking incentives and other financial issues of the country.
Natalie Ceeney, the chief ombudsman of the FOS, stated that banks should now uphold every PPI claim they receive as it is mandated by the High Court. The court decided in favor of customers for mis sold PPI and all high-street banks have set aside billions of pounds for refunding customers for PPI. However, it has come to her attention that some banks have refused to honor claims and have even rejected claims from their customers, given the 7/10 rating of their services for the insurance claims.
She stated that banks were trying to impart blame on customers and claims management companies for some of the bogus claims they received. Ceeney states that claims management companies are only there to help customers, but never entirely force them to do their claims. Any person in the UK virtually has financing, and every financing may virtually have a mis sold payment protection insurance, which is why banks must be patient in handling their customer’s claims.