The Financial Conduct Authority (FCA) has decided that a review of PPI settlements from 2012/2013 needs to be carried out to ensure customers were adequately redressed.
The order follows a bout of recent allegations that claims for PPI compensation during the time period were rejected without cause, undervalued and miscalculated. The review ordered by the FCA will investigate PPI settlements that concern over two and a half million claims. They state the review is to ensure that compensation claims made by customers were handled properly and that adequate compensation was paid out. Undercover reporters for The Times printed an article stating that many PPI claims for refunds were unjustifiably rejected; during a training session as a claims handler, they were told that those making claims would often fail to pursue their claim after it had been initially rejected.
That article was followed by an investigation by the BBC, which allegedly discovered cases of miscalculated PPI claims. Credit providers neglected to include charges incurred by insurance premiums when calculating refunds, and “comparative redress” policies used by Lloyds Banking Group underpaid customers sold a PPI policy with one premium.
The Financial Services Ombudsman has received a considerable volume of complaints surrounding the issue, and after investigating any legitimate complaints, over two-thirds of the cases result in a reversal of the banks’ decisions. This serves to confirm any suspicions by the FCA that banks are handling PPI claims unfairly and are deliberately underpaying or rejecting customers without cause.
The Chief Executive Officer of the FCA, Martin Wheatley, has asserted his belief that the review is a “positive move”. He claims the scandal in unprecedented, and believes the review will assist efforts to rekindle trust between consumers and financial institutions.
The result of the current review will map out the necessity of any future reviews. Any customers who have been affected by the mis-selling of PPI should have been sent information pertaining to the review and the investigation of their claim. Anyone who has not yet received such advice, but has lodged a claim for a PI refund during the years of 2012/2013 should seek legal advice.