Why Are Some Banks Not Paying Up for Mis Sold PPI Claims

PPI’s complete UK compensation package had increased to £25 billion in 2013 from its starting £9 billion in compensation, but still, banks are rejecting majority of PPI claims coming from customers or their PPI claim company thinking that they are fraudulent or lacking evidence. The Financial Ombudsman actually found that in 2011-2012, three quarters of the claims rejected by banks are in favour of customers, indicating that banks are not willing to pay up for their sins.

Chief Ombudsman of the FOS Natalie Ceeney explained the situation that the FOS is admittedly dealing with one of the biggest clean-ups in the UK’s financial services history. The Ombudsman is the last department for obtaining justice for customers since they have legally binding powers that allow them to have the banks do as they decide.

Even if banks are not paying up, they have different responses to the large quantity of legitimate PPI claims coming into banks.

Barclays said that it is committed to resolving all PPI claims quickly and effectively. They have effectively reduced the time it takes to process the claims. They continually blame Claims Management Companies for clogging the system with fraudulent claims.

Lloyds said that PPI claims relate to historic processes and procedures and that the FOS numbers do not show the same progress in other areas of the claiming process. They said they had issues in distributing PPI compensation payments to customers in the last half of the previous year.