Possible PPI delays
Thousands of customers who have been mis-sold payment protection insurance may face long waits to receive compensation from their lender. The upheaval caused earlier in the year by the Judicial Review has resulted in possible PPI delays across the lending world. The reason the Judicial Review proved so disruptive was that most of Britain’s largest banks opted to place all PPI claims on-hold while the Review was pending. This meant that thousands of customers faced months of uncertainty and that when the High Court returned its verdict, finding against the British Banking Association, banks were faced with huge backlogs of complaints to work through.
Under normal Financial Services Authority (FSA) guidelines, lenders have eight weeks in which to investigate a complaint and issue a response. With such a large backlog it was obvious that banks would struggle to meet these deadlines and it was concerned that some may rush through case loads resulting in poor complaint handling by lenders. It was viewed that it was more import that customers receive an adequate response to their complaint than whether they may face possible PPI delays. To deal with this situation the FSA opted to allow the country’s five biggest banks – HSBC, The Lloyds Group, Barclays and RBS – temporary extensions.
Under the rules of the extension the banks affected must report regularly to the FSA and must keep customers up-to-date with the progress of their complaint. The timescales for the extensions were applied as follows:
Although the Judicial Review has caused possible PPI delays the Court’s verdict, in favour of the FSA, is a huge victory for consumers and should open the door for thousands more unhappy customers to make successful claims.