The banking industry in the UK has been rocked by the payment protection insurance scandal over the last couple of years, with the public reeling from the level of mis-selling that took place in these trusted financial establishments for a period of over ten years.
Customers who took out loans or credit cards found that they had been tricked into paying for PPI when, in many cases, it was totally useless to them. As the claims process has gone on, the banks have lost battle after battle to stop the compensation payments being made, but now they have no recourse left. However, it has emerged that some don’t see this as an issue and have just been ignoring claims that come in or denying them baselessly.
Lloyds TSB, Barclays and RBS are the worst offenders. Lloyds TSB tops the list, rejecting around 1,600 claims for compensation a month. When these decisions are turned over to the Financial Services Authority (FSA) the regulatory body upholds an average of 98% of them. Barclays reject about 3,300, and 93% are overturned, whilst RBS turn down 300 a month and are forced to then pay 87% of the claims that reach the FSA.
HSBC are following hot on the heels of these three though, with 800 claims a month being rejected and the FSA overturning 66% of decisions.
These are truly staggering figures, and there is speculation that the banks are simply turning down as many claims as they think they can get away with in the hope that customers will give up before going to the regulatory body, saving the banks hundreds of thousands, if not millions, in compensation payouts each month.
These revelations are doing even more damage to the banks’ reputation. With the industry still struggling to gain a positive image with consumers, it seems incredible that the banks have not yet learnt their lesson.