Barclays sets aside £700m more to cover PPI claims
Barclays has set aside extra money to cover claims for mis-sold payment protection insurance (PPI).
The bank has decided it will need another £700m on top of the £1bn set aside in 2011 and the £300m in the first three months of 2012.
It said it had received more claims than it had expected.
PPI was supposed to protect customers who lost their jobs or became ill while repaying loans, but was widely mis-sold to those who did not want or need it.
Barclays' third-quarter results are due out on 31 October.
The bank said that, even with the extra provision, it expected its three-month profits to be in line with market expectations of £1.7bn.
The extra money takes Barclays' provisions for PPI mis-selling to £2bn and takes the total amount set aside across the industry to more than £10bn.
It means Barclays has made the second biggest provision, behind Lloyds Banking Group, which has set aside £4.275bn.
RBS has set aside £1.335bn and HSBC has made a provision of £1.087bn.
Barclays' announcement suggests that other banks may be forced to increase their provisions. For the full story http://www.bbc.co.uk/news/business-19995283
PPI claims in Thousands each day, says ombudsman
The financial ombudsman service is taking 1,500 new claims for payment protection insurance (PPI) compensation every day, figures show.
Complaints numbers have totalled 400,000, but remain only a "drop in the ocean" compared to all PPI complaints.
The ombudsman deals with cases that cannot be resolved between a consumer and financial institution.
It has found in favour of the consumer in seven out of every 10 cases it has dealt with.
PPI was sold along with loans and credit cards, wrongly in many cases, to cover repayments if people became ill or lost their jobs.
Banks are in the process of paying out Â£9bn in compensation to borrowers who were mis-sold PPI.
For the full story http://www.bbc.co.uk/news/business-19266951
PPI: One woman's £65,000 compensation payment
A businesswoman from Hertfordshire has been repaid nearly £65,000 by her credit card company, for mis-selling her payment protection insurance (PPI).
Roberta (not her real name) has been paid by the credit card company MBNA.
She had been paying premiums for PPI policies on one MBNA card since 1996 and another since 2001.
The policies were supposed to cover her in the event of her falling ill or losing her job and being unable to pay her credit card bills.
In fact, she could never have made a legitimate claim on the policies because she is self-employed.
"As a director of my own company I would never have been able to claim on the policy, and on the second card I was never given the option of asking for PPI, it just came through automatically," Roberta says.
Thanks to all the recent media publicity, she realised last year that the PPI had been mis-sold to her.
After complaining to MBNA directly, and then going to the Financial Ombudsman Service (FOS), the card company relented in June and told her a cheque would be on its way.
"I nearly fell off my chair," she says.
"I was absolutely staggered at the amount, I had no idea it was going to be anywhere near that."
For the ful story http://www.bbc.co.uk/news/business-18554478
Barclays sets aside extra £300m for PPI claims
Barclays has set aside an extra £300m for settling claims of mis-selling payment protection insurance, but says it made an "encouraging" start to 2012.
A £2.62bn accounting adjustment and the extra PPI provision meant the bank reported a statutory pre-tax loss of £475m in the first quarter, compared with a £1.66bn profit a year ago.
But stripping out the impact of these, it made a profit of £2.45bn, which was ahead of analysts' forecasts of £2bn.
It allowed £1bn in 2011 for PPI claims.
The increase in PPI provisions came after banks saw a steep rise in claims last year following the loss of a legal challenge over PPI rules in April.
PPI is supposed to cover borrowers' loan repayments if they fall ill, die, or lose their jobs. But it became highly controversial and there were years of campaigning by consumer groups against the widespread mis-selling of the policies.
For the full story http://www.bbc.co.uk/news/business-17850901
PPI complaints more than double in six months
Number of PPI cases lodged between January and June 2012 rose by 129%, as LLoyds and Barclays top list of most-complained about banks
Banks need to set aside more money to settle claims related to mis-sold payment protection insurance (PPI), the consumer group Which? has warned, as figures revealed the number of new complaints about the cover more than doubled in the first half of 2012.
Data from the Financial Services Authority showed banks and other firms received 2.2m complaints about PPI between January and June 2012, a 129% increase on the previous six months. Which? said refunding these customers could cost much more than the industry has anticipated.
PPI is sold by lenders alongside credit cards, loans and other consumer credit and is designed to cover repayments should a borrower be unable to work through sickness or redundancy. However, policies often have exclusions and in 2011 the high court ruled that companies should refund anyone who had been mis-sold cover they could never claim on.
Across the industry banks have set aside a total of£10bn to settle claims, but Which? said if complaints continued at the current rate some banks will have used up their reserves before the end of the year. For the full story http://www.guardian.co.uk/money/2012/sep/27/ppi-complaints-double
Mis-selling payments hit £379m
A record £379 million has been paid out in a month to consumers who were mis-sold payment protection insurance (PPI), the Financial Services Authority (FSA) has said.
The sum, which covers the month of November, is a rise from £268 million paid out in October, which had previously been the highest month recorded for redress since the figures began about a year ago.
The information comes from 16 firms which collectively had a 92% share of PPI complaints in the first half of 2011.
Reported by : Press Association Jan 27 2012
(Source : http://money.aol.co.uk/2012/01/27/mis-selling-payments-hit-379m/)
Regulators try to stop repeat of PPI scandal
By Sharlene Goff, Retail Banking Correspondent
Regulators are taking pre-emptive action to stamp out the mis-selling of financial products that have similar characteristics to payment protection insurance in an attempt to avoid another consumer failure.
The Financial Services Authority and Office of Fair Trading have united to issue guidance on how other kinds of payment protection products should be designed and sold to customers.
Reported by : FT
(Source : http://www.ft.com/cms/s/0/e89eacb4-0494-11e1-ac2a-00144feabdc0.html#axzz1krpM1Kg4)
Avalanche of insurance scandal claims
The problem of mis-sold payment protection policies is still growing, says Neasa MacErlean
Record numbers of consumers are predicted this year to have problems claiming on payment protection policies (PPI), with the result that many will make a formal complaint and even take their case to the Financial Ombudsman Service.
Despite a widespread belief that the problem has peaked, the Ombudsman has just warned that it is still growing to avalanche dimensions.
Some 20 million of these policies have been sold. They were usually designed to cover loan or credit cards repayments if the policyholder became unwell or unemployed, but they were widely mis-sold to individuals who either did not need them or would be unable to claim.
In its annual budget plan, published yesterday, the Ombudsman predicted that PPI cases will absorb half its resources, amounting to the resolution of 130,000 cases, during the 2012/13 financial year. This represents a 55 per cent increase on the projections it made 12 months ago when it predicted the resolution of a maximum of 84,000 PPI cases for the current financial year.
Reported by: The Independent 29th Jan 2012
(Source : http://www.independent.co.uk/money/insurance/avalanche-of-insurance-scandal-claims-6286371.html)