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PPI claims process risks discouraging victims

One in five (18%) find firms difficult to deal with when making a PPI complaint

Consumers have just over a year to claim compensation for mis-sold PPI, but new Which? research has revealed that one in five (18%) people making a mis-selling claim are still finding some are making the claims process tough. 

When the Financial Conduct Authority (FCA) announced that new payment protection insurance (PPI) complaints will not be considered after 29 August 2019 – only 15 months away – firms were told to improve their processes, by making it quicker and easier for consumers to lodge a claim for mis-sold PPI.

In February and March 2018, Which? surveyed 1,743 people who had made a mis-selling claim through Which?’s free Which? PPI tool. We got in touch with people at least four weeks after using the tool to find out their experiences of dealing with different firms.

While most people report finding banks easy to deal with, our survey reveals that some banks could be doing more to ensure a smooth process from start to finish. Click the links to find out what we discovered about the biggest banks.


Lloyds and Santander PPI process too clunky

Those making a claim against Lloyds Banking Group and Santander found the claims process particularly laborious – in both cases, one in five said the banks were fairly or very difficult to deal with (Lloyds 21%, Santander 22%).

Lloyds Bank Group’s brands – which includes Bank of Scotland, Black Horse and Halifax – were also the most likely to follow up online claims by asking for further details, typically by sending a questionnaire.

While it’s not unusual or incorrect for banks to follow up online PPI claims asking for more information, we expect them to make this process as simple as possible.

Lloyds routinely sends complainants a 12-page PPI questionnaire to complete, requesting details about their salaries, work benefits and savings at the time they were sold PPI.

Customers said they felt overwhelmed by ‘long, daunting forms’ that had to be returned within 14 days, or the bank would have to close the file. One commented:

‘I found the forms very difficult to complete. I believe they make it difficult for the average man in the street to complete to get them off checking thoroughly (Bank of Scotland).’

Santander brands – including Abbey National and Alliance & Leicester – were also likely to ask for extra details via ‘lengthy, poorly printed forms’.

Many customers seemed frustrated by slow responses from the bank and being asked to provide paperwork or details that didn’t seem relevant to the claim.

‘They were expecting too much information from us, that they really should have had themselves (Alliance & Leicester).’

‘They were not very cooperative and kept asking for more documents and information (Abbey National).’

Automatically sending out lengthy forms without any guidance acts as a barrier, and risks putting some people off making a valid claim. Indeed, Santander told us that questionnaires are only returned in approximately 43% of cases.

It could also result in more people asking expensive and unnecessary claims management companies (CMCs) to make the complaint for them, losing out on a third of any compensation owed as a result.

Smoother process for Barclays and RBS claims

Barclays and and the RBS Group (which includes NatWest, Royal Bank of Scotland and Ulster Bank) were the least likely to send out questionnaires, according to our survey, and had the highest percentage of customers (63%) rate them as fairly or very easy to deal with.

Positive comments referred to straightforward procedures and prompt responses.

‘The conversations with staff were respectful and it felt as though they were designed to assist rather than to minimise liability (NatWest, RBS Group).’

‘They were very forthcoming with information and gave a reply within two weeks (Barclays).’

Response from Lloyds

Lloyds says it only uses the forms to gather information, not to assess the complaint, and will never reject complaints based on the answers.

‘Whilst basic details, such as that gathered by the Which? online form, are useful for identification, they do not provide us with enough information to assess a PPI complaint fully. In instances where we have minimal customer information, we will send a questionnaire, developed in partnership with the FCA, to gather further details.’

Which? feels that other banks gather additional information from customers in a more proportionate way, putting fewer people off completing their claim.

The bank also told us that the two-week deadline is to ‘encourage customers to return’ the forms, and that it would contact the customer if they didn’t hear back.

But, we saw letters that stated: ‘If I don’t hear from you within 14 days from the date of this letter. I’ll be unable to progress your complaint and will close our file.’

This suggests that failure to complete the forms would result in the complaint being dropped.

Santander to improve claims process

Santander says that it does automatically send out a PPI questionnaire designed by the Financial Ombudsman Service (FOS), and feels that ‘it is reasonable and fair to apply the same approach as the FOS when conducting our investigation’.

However, the bank has pledged to work with Which? to ensure that consumers are clearly informed that their complaint will be investigated regardless of whether they have the full details requested in the questionnaire or not.

Make a PPI claim before it’s too late

Monthly compensation for mis-sold PPI reached a high of £415.8m in January 2018, bringing the total cost of the scandal to £30bn so far. But, the biggest banks still have billions set aside for future PPI claims.

Which? has a free PPI claims tool to help you make a complaint and send it directly to any major bank or lender you had credit with.

Firms should resolve this complaint within eight weeks. One in four people using our PPI tool are successful, earning an average of £2,600 in compensation, with no fees.

The FCA has set a final deadline of 29 August 2019. But, you may have an earlier deadline if you previously received a letter from your bank or lender stating that you were likely to have been mis-sold PPI.

Between 2013 and 2015, firms wrote to 5.5 million high-risk customers and some of these letters (though not all) offered a three-year window for claims. The regulator has confirmed that these deadlines stand.

If you were sent one of these letters, your deadline is three years from when you received it, not 29 August 2019.

What if I can’t find the paperwork?

You can still make a claim if you can’t find any old statements or a copy of the original credit agreement:

  • Make a subject-access request (SAR) to your lender, asking for any information about PPI premiums.
  • This used to cost £10 but will be free of charge once the new General Data Protection Regulation (GDPR) rules come into force from May 2018.
  • If you’re struggling to remember who the lender was, check your credit report – which you can do for free.
  • This won’t include information about PPI specifically but it will list any credit agreements you’ve had in the last six years.

Find out more: Common PPI questions answered 

What if my claim has already been rejected?

Thanks to a Supreme Court ruling in Plevin vs Paragon Personal Finance Ltd, you could be eligible for compensation if your provider earned a high level of commission from PPI without making this clear to you.

If your claim has previously been rejected, you should lodge a new complaint for any undisclosed high commission.

Lenders have been told to contact customers who could be eligible to bring a new complaint in light of this ruling.

In most cases, banks are sending letters telling customers to resubmit a claim, but some firms are going even further – we’ve heard from Principality customers who were sent a cheque in the post after the bank proactively reviewed cases that were due compensation.

If you’ve already received compensation for PPI mis-selling you won’t be able to make another claim.

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