News Review


Consumer claims on PPI will be upheld By Sarah Davidson


millions of consumers who were mis-sold Payment Protection insurance are in line for compensation after the High court ruled that banks will have to pay redress retrospectively. april’s judgement came


after the British Bankers’ association launched a judicial review last october in response to Financial Services authority rules forcing banks to compensate customers who were mis-sold PPi before the regulatory change. Since october the Financial


ombudsman Service has received up to 5,000 PPi complaints each week and following last month’s ruling, up to £2.7bn could be paid in compensation by the banks to 2.7 million people. natalie ceeney, chief


ombudsman, said: “this judgment is very clear-cut – and it confirms that the


Building societies supporting intermediary market By Sarah Davidson


mutuals had a busy month in april with commitments to lend more via the intermediary market and to first-time buyers as well as rumours of possible and confirmed merger and acquisition deals. teachers, the dorset-based


society that ranks 34th in the uK, confirmed plans to launch an intermediary lending arm in early may, abandoning its direct-only


ombudsman’s approach to PPi complaints is right. People have been waiting a long time while the banks’ legal action has been ongoing. i would now like to see financial businesses showing real commitment to sorting out their customers’ complaints efficiently and promptly.” the FSa also welcomed


the judgement and issued a statement saying: “our primary aim has always been to get proper redress, once and for all, for those with genuine complaints. We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining.” there have been more


than 1.5 million complaints made about PPi since the FSa took over regulation of it in 2005. on average firms have rejected around 60% of


policy. chorley also showed its commitment to brokers, revealing plans to increase mortgage lending done in the intermediary sector this year and announcing it has added atom to its panel. newcastle raised its game


launching a series of fixed rate deals through Brilliant Solutions while Leeds launched a shared ownership mortgage product designed for first-time buyers, available up to 95% borrower share on a fixed rate at 6.19% with an overall maximum loan to value of 75%. Phil coombes, head of


intermediary sales at Leeds Building Society, said: “We are all well aware of the difficulties facing first-time


4 mortgage introducer MAY 2011


the complaints made to them but some rejected almost all of them. However, the vast majority of complaints referred to the FoS are found in the consumer’s favour. Kevin carr, chief executive


of Protection review, said: “PPi has its place in the market but the banks took advantage and didn’t know where to stop. as such the ruling represents a common sense victory for consumers and the media. Hopefully some of the banks will think twice next time before treating their customers so poorly.” michael Pilgrim, founder


and director of claims firm randall and Vickers, was also supportive of the decision saying: “Justice has been done. Yet again the banks tried to wriggle out of their responsibility for misleading millions of


innocent


customers. Before the ruling, the FSa


buyers buying a home. this shared ownership product facilitates that first step and provides a starting point to build up to full home ownership as earning potential increases.” coventry launched a


number of residential fixed and variable rate products as well as revealing it may bid for northern rock’s “good bank” when it is put up for sale. it said: “the government


and uK Financial investments have yet to confirm the process and timetable for the sale of northern rock. When that decision is made the board will examine the criteria and decide the next steps to take. “We cannot rule anything


approved a £25m industry levy increase to allow the FoS to boost its reserves to deal with the expected surge in payment protection insurance complaints. the levy will apply to firms under the FoS’ compulsory jurisdiction including firms authorised and registered by the FSa who have not had cases referred to the FoS. alan Lakey, partner at


Highclere Financial Services, said: “there will be a financial impact for brokers but it should be low compared to scandals like Keydata. the real effect that PPi mis- selling has had is that it’s been yet another knife in the reputation of advisers even though it was predominantly sold by the banks.” the BBa expressed


disappointment with the ruling and is considering whether to appeal the decision.


out but emphasise that whatever decision is made will be in the best interests of the society’s members.” meanwhile Yorkshire


Building Society and norwich & Peterborough agreed merger terms after n&P suffered a pre-tax loss of £48.9m last year and agreed to pay £57m compensation to 3,200 Keydata investors. the deal is subject to


member and Financial Services authority approval but looks set to complete in november 2011.


the


combined society will have three million members and 224 branches and will be principally focused on residential mortgages and savings.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60