Legal Eagle Column by Dean Durham.
Consumer champion & legal expert from
www.youandyourrights.co.uk
Another PPI Scandal
If you have received a PPI pay-out from the Lloyds Banking Group (which includes Halifax and Black Horse), Barclays or RBS/Natwest you may have been short-changed and therefore may be in line for a further pay-out. Here’s what you need to know:
Why is there a further claim? These banks have taken advantage of a loophole that allows for something called “alternative redress”, the result obviously being that the bank pays out less and as a consequence your pay-out is reduced. The loophole has to do with those customers who had purchased single-premium PPI policies, where the entire cost of the insurance was paid upfront and added to the loan. Instead of returning all of the customers’ money back, the bank was deducting the cost of a cheaper, regular premium policy from the pay-out, citing the ‘alternative redress’ rules outlined by the UK fi nancial regulator.
This means that they were treating these claims as if they’d just been sold the wrong type of PPI rather than completely mis-sold PPI.
If it’s a loophole how can I claim? Whilst providers are within their rights to off er comparative redress under the Financial Conduct Authority’s (FCA) rules, they must only do so “fairly” and consistently.
In these cases where the banks have made an assumption about whether the customer would have purchased the cheaper option it is likely that they fall outside of being ‘fair’. How can the bank therefore make such an assumption without having either a crystal
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ball or absolute confi rmation from the customer? Further, many people argue that they may not have gone with any kind of PPI or would have gone with another company and therefore it would be impossible for the banks to assume that they would choose that particular product.
How do I know if have a claim? Barclays, Lloyds Banking Group and RBS/ Natwest have all confi rmed that they took advantage of the ‘comparative redress’ loophole during the following periods: Lloyds Banking Group - since February 2013. Barclays - between October 2012 and October 2013. RBS/Natwest - since early 2013.
So if you received a pay-out from one of the above banks during the applicable period and your off er letter contained the words “alternative redress” or “comparative redress” you may have a claim. If in addition to this you can categorically state that you would not have purchased a cheaper policy (if given the option at the time that you purchased the original PPI) your chances of having a claim dramatically increase.
I think I have a claim, what next? Dig out the letter that you received from the bank when they confi rmed that they were going to compensate you for the PPI being mis- sold and see what it says, as described above. If you cannot fi nd it contact your bank and ask them if you were given alternative redress when they paid out your PPI compensation. If they confi rm that this was the case say that you wanted a full refund and demand that they deal with this. Alternatively, if they
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