PPI Complaints Handling Periods for Major Banks Extended
Major banks such as Barclays, Lloyds Banking Group and RBS now have more time to handle Payment Protection Insurance (PPI) complaints as the Financial Services Authority has extended the time periods that these firms have to deal with their backlog of stayed PPI complaints.
The FSA intended to ensure that these banks could handle the PPI complaints properly, thus putting the arrangements in place. The extension also covers the high volume of new complaints on PPI.
Similarly, the FSA granted the same privilege to HSBC, meaning customers who have complained with the bank about the way their PPI policy was sold to them or charged will have to wait longer for a resolution.
Margaret Cole, the FSA’s interim managing director of the Conduct Business Unit, said: “We want to see all PPI claims for compensation dealt with swiftly and appropriately. However some firms are facing a huge backlog and now a surge of new complaints which has created a bottleneck. It is not in the interests of consumers to receive further poor handling of their complaints as a result. This temporary extension means that these firms can process these complaints properly and fairly.
“We will be monitoring their progress carefully to ensure the new deadlines are met, that complaints are dealt with as promptly as possible and the backlog is cleared as a matter of urgency.”
PPI complaints have to be responded to within eight weeks under the FSA rules.
The extension allows additional time for firms to deal with the claims that have been put on hold. Also, it agrees additional time for the firms to deal with PPI complaints received since the end of their involvement in the judicial review.
According to the FSA, PPI complaints still with the firm but put on hold during the judicial review will receive a decision by the end of August while PPI complaints received after the conclusion of judicial review but on or before the last day of August will be responded to within 16 weeks.
Additionally, PPI complaints received on or after the first day of September and before December 31, 2011 will be responded to within 12 weeks.
The FSA associated the temporary time extensions with strict conditions.
For example, the firms with the temporary time extension will have to keep PPI complainants and their customers fully informed, and provide the FSA with regular reports on compliance.
The FSA expects all PPI complaints handling to return to the requisite eight-week standard by January 1, 2012 at the latest.
The time extensions only apply to the three named firms and do not affect all other PPI complaints.
“A number of firms decided to put some or all PPI complaints on hold when the British Bankers’ Association launched a judicial review of the FSA’s new PPI complaints handling measures. The FSA and the Financial Ombudsman Service won the case and the BBA decided not to appeal on 9 May 2011,” the FSA noted.