The headline figure used throughout April for PPI redress has been seen on many website banners and adverts, £8billion. This is the money they say banks have put aside for consumers who have been mis-sold PPI. Many experts believe this amount is insufficient as claim levels rise; this figure could soon exceed £10billion. Recent news suggests this is the case as more lenders admit they have got it wrong! Continue reading
Mortgage payment protection insurance (MPPI) has been in the headlines for all the wrong reasons over recent years as it is associated with mis-sold policies, there has been a great deal of speculation about its future. Efforts have been made to disassociate MPPI, which offers great value and protection to many consumers from the mis-sold PPI scandal. Experts believe there is a future for the sale of this product and the new rules that have come into force this month support this. Continue reading
As the payment shock for many borrowers continues with high SVR’s, lower interest rates on mortgages are often not what they may seem. It has been reported that the cost of ‘arrangement fees’ charged by lenders and associated with buying a mortgage, have increased by as much as 30 per cent over the last three years, however, the mortgage broker sector are experiencing a decrease in the fees paid to them by lenders for introducing borrowers causing more pain. There seems to be only on winner!
With huge losses for banks in particular to make up following one mis-sold financial products scandal after another; feelings are running high amongst many within the financial services sector about the strategy being used to balance their books. Sceptics believe that the provisions made for PPI claims by some banks will never reach all of the victims for which the funds are intended. So who will pay for these forecast losses? It would appear that borrowers will.
Expectations were high when the good news sunk in relating to a sustained all time low bank base rate; forecasts are that this may continue for a while yet, however, has this been reflected in the ‘true cost’ to borrowers? The simple answer is no. Low interest rates now often attract high arrangement fees. Borrowers who are lucky to be offered a loan need to consider the true cost; if this fee is added to a loan and interest-only terms apply, the true cost of a loan can be high, sometimes it is better to take a higher interest rate with a lower arrangement fee. Making this clear and understood by borrowers is difficult; always look at the ‘true cost’ of a loan over the period in which it is borrowed. It should be found in the small print.
With mortgage brokers experiencing lower procuration fees paid by some large lenders, also aggressive marketing attempts to attract borrowers into buying direct from lenders, reports about the demise of brokers continues, we may see the life squeezed out of the mortgage market. This could lead to the return of increased volume, niche lending at higher cost to those who do not qualify for the ‘cherry picked’ client profiles wanted by lenders who are reluctant to lend.
As shareholders are recommended to vote against Bob Diamond’s £17 million plus pay packet, many consumers may feel aggrieved that mis-sold PPI policies sold by Barclays are seemingly swept under the carpet as they continue to wait for redress.
Following last years High Court judgement, 20th April, dismissing the action brought by the British Bankers Association relating to redress for PPI claims, Bob Diamond announced on 9th May that Barclays would not be joining an appeal application against the judgment, this was welcomed. He said, “It was in the best interests of our customers. Barclays will assess and address their complaints as quickly as practicable.”
Ironically, Diamond did not preside over mis-sold PPI in the UK; however, the initial provision agreed with the FSA of £1 billion is believed to be wrong and is under review. Many believe that Diamond wants to move on and rightly so, but you can’t take the helm of a troubled ship and sweep the waves out of your way. Many PPI claims are still being processed and consumers will inevitably be in a long queue.
Most banks find themselves in a similar position to Barclays, some joined them in their decision to make a provision for redress, these include Lloyds Banking Group (£3.2b). Large claims management companies (CMC’s) are known to work closely with banks to ensure claims are processed efficiently on behalf of claimants. Statistics prove that the majority of consumers use a CMC to process their PPI claim, suggesting that if the DIY route is considered by consumers, it could prove to be a minefield for many.
As the relationship strengthens between Gladstone Brookes and local charity the Warrington Wolves Foundation, our staff have been offering their help and support wherever required. Hayley Mcateer describes her recent visit to the Wolves’ rugby ground for “Meeting & Greeting”.
My name is Hayley and I work within an investigation team here at GB.
The Warrington Wolves Foundation have setup a new scheme, “Meeting & Greeting”, which would be a handful of volunteers to be around the Halliwell Jones Stadium a couple of hours before kick-off at our home games to make sure that the incoming crowd are all happy.
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