Are banks and lenders avoiding responsibility in the payment protection insurance crisis?

Banks and financial lenders could be shirking their responsibilities and unfairly putting the blame for the payment protection insurance saga onto companies helping clients make claims, it has been suggested.

Speaking to the BCC, policy director for the Claims Standards Council Andy Wigmore defended PPI claim companies who have come under recent fire for allegedly encouraging people to make false claims, or helping to bring cases to banks who customers have never actually had any dealings with.

Mr Wigmore said that claims management companies are just trying to find out whether or not people are entitled to claim, and also pointed out that profit is only made if a genuine and successful claim is made.

He also noted that people may be entitled to claim for financial products they took out years ago, and the claims companies can assist them in dealing with the process.
“If someone took out a loan on a credit card 10 years ago, they might not know or may have forgotten the details,” he said.

His comments follow the criticism of claims management companies by Lloyds Banking Group boss Antonio Horta-Osorio. Earlier this week the banking boss said that one in four PPI claims made to Lloyds in the first few months of this year were brought by people who had never actually had a PPI policy with the firm.

Lloyds also recently had to boost its PPI claims fund by a further £375 million, and many of those in the financial sector may find that they sympathise with the plight of financial companies forced to spend cash on spurious claims made by misinformed customers.

But, as the BBC speculated in its article, “after all, if it was the banks that created this mess by mis-selling PPI, should they not have to pay to clear it up?”
Speaking about the issues around PPI claims, Clear Law paralegal James Acheson said: “It is certainly disappointing that banks and other lenders are having to spend cash on bogus claims when there are so many UK consumers who are genuinely entitled to compensation money.”

Under section 75 of the consumer credit act customers have legal protection which ensures that they never have to pay off debt for something which wasn’t received, or did not fit with its description – this could be anything from an electrical device to a holiday.
Generally speaking, a credit card company is liable for purchases of up to £30,000 – and this rises to more than £62,000 if the goods and the credit were supplied by the same firm.

http://www.clearlawonline.co.uk is a reputable legal firm with a wealth of experience helping clients to get the payment protection compensation they are entitled to.

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Andrew Kwan

Solicitor

Clear Law Solicitors

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