Millions could be owed additional compensation for mis-sold payment protection insurance (PPI), following a Which? Money investigation into the way banks handle claims.
The story of one Which? member led to the discovery that banks routinely dodge potential refunds, by failing to check all policies when customers make a claim.
With the deadline set for 29 August 2019, you might hope that firms are doing everything they can to repay customers who were mis-sold PPI.
But, following our report in May that the complaints process can discourage legitimate claims, we can reveal that firms are also doing the bare minimum to compensate victims – by failing to investigate all possible policies sold, unless they are specifically asked to do so.
Which? is calling on consumers to resubmit claims if they aren’t sure that all products were considered, or take their complaint to the Financial Ombudsman Service.
In our exclusive story, find out why:
- NatWest denied customer £12k payout
- Banks say the onus is on customers
- You don’t need to pay a claims company to get PPI back
- You should resubmit your claim if you’ve been rejected
‘I was denied a £12,000 payout by NatWest’
The issue first came to our attention when Valarie Henderson, 63, from County Durham (above), called the Which? Money Helpline outraged that NatWest had withheld compensation for more than a dozen PPI policies.
Valarie should never have been sold PPI when she took out loans in the early 2000s to fund her business. As a self-employed childminder, she wouldn’t have been able to make a claim on the policies.
NatWest previously admitting to mis-selling four policies and paid compensation in 2009 and again in 2014. A month ago, Valarie was prompted to make one final check and was furious to discover that she was owed refunds on a further 13 mis-sold policies:
‘A leaflet dropped through my door which mentioned PPI mis-selling on mortgages. I knew I had one with NatWest so I called up and said the magic words – I asked for all of my accounts to be checked.’
‘I’m now expecting to get £12,784 back. I doubt I would’ve ever got the money if I hadn’t seen that leaflet.
‘Realistically there has to be some cut-off date for PPI claims, and I try not to be cynical, but it makes my blood boil that NatWest could well have alerted me to these policies and unclaimed funds. This debacle has been going on for 10 years.’
RBS Group, the parent company of NatWest, has confirmed that it doesn’t automatically check across its entire product suite where claims relate to a specific product or products, although it has made a number of improvements to the PPI complaints process, and told Which? it would encourage anyone who is yet to check if they had PPI to contact them directly.
But Valarie’s experience isn’t an isolated one.
A Which? staff member recently received a cheque from Capital One for mis-sold policy dating back to 1997, after finding an old statement at home. When she spoke to its helpline asking after the full response letter, the call handler saw that she had another credit card account listed, also with PPI.
We also spoke to a Barclaycard customer who had a complaint rejected back in June 2016 – he was told that if he hadn’t included his existing account details the first time round, all of his cards would’ve been investigated.
Banks say the onus is on customers
Other high street banks – Barclays, HSBC, Lloyds Banking Group, Santander and Nationwide – have also told Which? that investigations are limited to the policy referenced when a customer makes a complaint, unless they make a ‘general complaint’ or ask them to check for all policies sold.
The Financial Ombudsman Service (FOS) said it would only expect a bank to look into all PPI products if the consumer wasn’t sure (e.g. by telling a firm ‘I think it was on a credit card’), although the Financial Conduct Authority (FCA) told us it is working with firms to make it easier for consumers to ask for a PPI check on all brands and products at the same time:
‘It is important that consumers are able to check easily whether or not they have had PPI and then decide whether they want to complain. A key objective of our advertising campaign is to make sure that consumers understand that they may have had PPI on a broad range of products.’
WIth the FCA’s deadline looming, Which? believes it’s more important than ever that banks take a holistic approach to claims, even where a customer has made a single-product complaint.
Consumers are encouraged to give details such as account numbers when they make a PPI complaint, yet firms are now telling us that where a specific policy number is referenced, only that product is investigated.
It doesn’t take a cynic to see that firms might be avoiding broader complaints that would require them to investigate a claimant’s full policy history.
Make a successful PPI claim
PPI was sold alongside credit cards, store cards, loans and mortgages, intended to cover repayments in case you lost your income through illness or redundancy. But it was mis-sold on an unprecedented scale to people who couldn’t ever make a claim, or didn’t want it in the first place.
So far, firms have paid a total of £32.2bn compensation, and have set aside millions more to cover claims through to the deadline next summer.
If you aren’t sure whether you had PPI, submit a free subject-access request asking for information about PPI premiums, which would throw up any policies. Your credit report won’t include information about PPI specifically but it will list any credit agreements that were still in place up to six years ago.
Which? can also help you submit a free PPI claim online.
All claims submitted will automatically request that firms check for all possible PPI policies held, meaning that they can’t get away with only investigating the products you remember taking out.
Resubmit your claim if you’ve been rejected
Thanks to a Supreme Court ruling, many people who took out PPI are owed compensation even if it wasn’t mis-sold, because firms didn’t disclose how much they earned in commission.
If your claim has previously been rejected, lodge a new complaint for ‘undisclosed high commission’.
It doesn’t matter if you don’t how much commission was paid for your PPI policy, but you will need to complain before the deadline on 29 August 2019.
Find out more: Common PPI questions answered