Lloyds fined £4.3m for delayed PPI redress

March 5th, 2013

AMY LODDINGTON, Financial Reporter – Tuesday, 19 February 2013

The FSA has fined three Lloyds Banking Group firms a total of £4,315,000 for failings in their systems and controls that resulted in up to 140,000 customers receiving delayed payment protection insurance redress.

The three firms are Lloyds TSB Bank Plc, Lloyds TSB Scotland Plc and Bank of Scotland plc (together, LBG).

Between May 2011 and March 2012, LBG sent 582,206 decision letters to PPI complainants agreeing to pay redress to them.  FSA rules state that redress must be paid promptly and, in line with that, LBG aimed to make payment within 28 days of these decision letters.  However, a series of failures at LBG meant that not all customers were paid redress within that time frame.

Up to 140,209 customers – nearly a quarter – received payment after 28 days.  Around 87,000 customers had to wait over 45 days, 56,000 over 60 days, 29,000 over 90 days and 8,800 over 6 months.  Of the total, 24,589 payments inadvertently dropped out of the process and LBG had to take action to ensure the payments were made.  The payments were identified as a result of customers calling to chase payment and media attention.

Further, when customers telephoned LBG to enquire about the non-receipt of expected PPI redress payments, deficiencies in its process meant LBG was unable to fast-track the payment to the customer, inform them when payment would be made, or explain why it had been delayed.

Tracey McDermott, the FSA’s director of enforcement and financial crime, said:

“The industry let customers down badly in relation to the sale of PPI.  The significant volume of complaints is a product of LBG’s own failings and the least customers can now expect is that redress, when it is due, will be paid promptly.

“In short, LBG’s PPI redress payment systems fell well below the standard the FSA expects, and the size of this fine reflects how seriously we view these breaches. All regulated firms must treat those who complain fairly and that includes paying redress promptly when it is due.

“PPI is an area of continuing focus for the FSA and we continue to monitor how firms handle complaints and pay redress.”

LBG agreed to settle with the FSA at an early stage of the investigation and therefore qualified for a 30% discount. Without the discount LBG would have been fined £6,164,327.

PPI complaints rise ‘unprecedented’, says ombudsman

March 5th, 2013

BBC News, Tuesday, 5 March 2013

Read more: http://www.bbc.co.uk/news/business-21654732

The financial ombudsman service is taking on 2,000 new cases a day following payment protection insurance (PPI) complaints, with numbers rising at “unprecedented” rates.

The service received 211,885 new PPI complaints in the second half of 2012.

These made up nearly three-quarters of the 283,251 new complaints sent to the ombudsman during the six months.

The service rules on cases that remain unresolved between a customer and a financial institution.

‘No sign of slowing’

Payment protection insurance was designed to cover loan repayments for policyholders who became ill, had an accident or lost their job. Yet it was mis-sold on a massive scale to customers who did not want or need it.

Now, they are each receiving an average of nearly £3,000 in compensation, if their claim is successful. Refunding these customers has cost the UK banks a collective total of more than £15bn, following the latest provisions by the major banks.

Some claims are disputed by the banks and these often end up with the ombudsman.

Lloyds TSB Bank had the highest number of PPI cases referred to the ombudsman of any institution during the second half of the year, but the ombudsman found in the customers’ favour in 86% of the cases against the bank.

This was a higher level than all of the other major UK banks.

“The number of PPI complaints has continued to increase at unprecedented levels,” said Natalie Ceeney, chief financial ombudsman.

“As the complaint levels show no sign of slowing, consumers are increasingly having to wait longer to get their complaints sorted – with many businesses still continuing to cause unnecessary delays.

“Where businesses have shown a real commitment to better customer service and diligent complaints handling – including actively engaging with the ombudsman – cases are resolved more quickly and easily, to the benefit of everyone.”

Lloyds has said that it reviews all PPI claims in “an in-depth manner that produces fair outcomes for customers”.

The banking group said its complaints levels in general were falling.

“We are very disappointed with the number of PPI complaints that have been referred to the ombudsman service, and we are actively addressing this with the ombudsman,” said Martin Dodd, customer services director at Lloyds Banking Group.

“We are confident that we will see an improvement throughout the year.”

Surgeons set new standards for cosmetic treatments

March 4th, 2013

APIL PI Focus: March 2013

Only surgeons should provide cosmetic surgery and, only doctors, dentists and nurses who have been appropriately trained should provide non-surgical cosmetic treatments such as Botox, the Royal College of Surgeons (RCS) has recommended. Currently, non-surgical procedures such as laser treatments or injectables such as Botox, can be administered by anyone, anywhere, with no medical training.

Aimed at all doctors, dentists and nurses involved in cosmetic practice, Professional Standards for Cosmetic Practice focuses on the behaviour and competencies medical professionals should be expected to demonstrate when providing cosmetic procedures. The standards state that financial deals, such as time limited discounts, should be banned and stringent psychological assessment promoted. They also set out the professional duty practitioners have to their patients.

Mr Steve Cannon, chairman of the working party and RCS council member, said, “As the majority of cosmetic procedures are not available on the NHS, we must ensure that commercial interests do not compromise patient safety. With the demand for cosmetic surgery and non-surgical treatments rising year on year, it is crucial that the highest level of professionalism is maintained amongst practitioners.”

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