The pace of new claims for PPI mis-selling is heating up as the deadline draws ever closer with tens of thousands of consumers anxious to beat the cut-off date.
LBG receiving 190,000 inquiries a week
Announcing the addition of an amazing £½ billion to its PPI provision, Lloyds Banking Group (LBG) – which also includes Halifax and Bank Of Scotland – revealed they are now receiving 190,000 PPI information requests (PIRs) a week.
Previously they had been receiving around 70,000 requests from consumers to see if PPI had ever been attached to any agreement with the bank, but the number has shot up in recent weeks and the bank expects it to remain at the same level until the deadline at midnight on August 29th.
PPI Claims ‘gone nuclear’
The last minute rush to lodge a claim prompted one bank official to say the process had ‘gone nuclear’.
He told Times journalist Nicholas Megaw: “As we get towards the end there has been an absolute surge in information requests. It’s gone nuclear in the second quarter of the year.”
More than a decade after the scandal first came to light, the UK banking industry is still paying out an average of £⅓ million a month in compensation with the overall payout since January 2011 now standing at £35.7 billion.
Bank manager spills the beans on mis-selling
In an amazing interview a former business manager from a high street bank revealed some of the tactics which had been used to mis-sell PPI in the past.
Consumers were sold an insurance product they didn’t want, didn’t need or couldn’t have made a claim on because of exclusion clauses which were not explained to them.
Now the manager has revealed some of the tactics the banks employed to make their sales:
- Staff were incentivised to sell on a performance related bonus system
- Encouraged to sell policies even to other members of staff, whether they needed it or not
- Senior management only wanted sales targets met without worrying about how it was done
- Staff not meeting sales targets were talked to by senior members of staff
- Failing to meet targets could result in withdrawal of individual and team bonuses
Presumptive selling was another often used tactic where the terms of the loan were drawn up to include the insurance instead of it being offered as an optional extra.
The Final Countdown
The FCA launched its Final Countdown to the claims deadline by trying to get consumers to remember what they were doing with financial agreements in the Nineties and Noughties.
Spokeswoman Emma Stranack said: “The PPI deadline is closing in. With just over four weeks to go until 29 August 2019, we’re asking people to cast their minds back to the Nineties and Noughties and what might have caused them to take out a loan, credit card or other finance agreement.
Weddings, house moves, new cars and holidays are just some of the types of investments people commonly employ credit to help with.”
Their research has shown that an astonishing 87% of UK adults passed ‘a significant milestone’ in those two decades when the majority of the 64 million PPI policies were sold.
Almost half of the population bought a car (49%), more than a third (35%) bought a house and just over a quarter (27%) got married. More than four in ten people – 22 million – recall taking out a credit card.
But PPI could also be attached to an overdraft or a store card, in fact anything which was bought on credit.