Banks tighten up on PPI claims as deadline looms

The bank is said to have made around 20 calls to three home and work numbers of a Tayside nurse in pursuit of “more information” about a PPI policy the customer says she should never have had.

Claims firm Beat the Banks says it is typical of the response to new complaints to Lloyds, which this week set aside another £500million for PPI compensation, taking its total to £14billion.

RBS meanwhile has adopted a policy of withholding customer account information that it used to provide in response to PPI claims, according to Mike Begg of Beat the Banks. It was Mr Begg, a former Clydesdale banker, who first complained to the Financial Conduct Authority in 2013 that the Clydesdale was withholding customer information on grounds of data protection – one of the failings for which the Clydesdale was fined £21m by the regulator this year.

Lloyds has denied that it is harassing customers with excessive calls, but in response to The Herald neither Lloyds nor RBS has denied tightening up its complaint handling procedures. With the regulator earlier this month proposing a cut-off date of spring 2018 for all PPI claims – which Lloyds this week said was too long - the apparent toughening up may be a sign that a seven-year bonanza which has injected £25billion back into consumers’ pockets is at last coming to an end.

The nurse, who does not want to be named, was sold the policy with her Halifax mortgage in 2002. According to Mr Begg, she was ineligible for PPI on two grounds, her 12-month sick pay entitlement in the NHS, and a pre-existing medical condition which she was never asked to disclose.

After Mr Begg filed the claim last month, the bank first began phoning the nurse at work. “A colleague got a bit irate with them and said this is an NHS line,” she said. “Then they phoned my mobile and I answered it. I didn’t really engage in a huge amount of conversation, and I hung up on them. Within about 30 seconds they phoned my husband’s mobile, they were determined to get some sort of dialogue going.”

Calls from the same number then followed “two or three times a day over the next 10 days”.

Beat the Banks had advised the nurse to tell the bank that that all the necessary information was set out in the completed 11-page form provided by the Financial Ombudsman Service.

After failing to speak to her any further, the bank stopped calling. But the complaint was rejected.

Mr Begg said: “When we put in a mortgage complaint, whether it’s Halifax or Lloyds TSB, nine out of ten are now getting declined. Previously to get a complaint rejected was very unusual because ours are always backed by the evidence.

“We suspect what is happening is that complaint handlers are not getting a copy of the questionnaire that we fill in – there couldn’t be any more questions on it.”

In response to a complaint by Mr Begg about excessive phone calls to another client, Lloyds said it had no intention to harass its customer, but “if we review a case without direct contact.... any gaps in the information may have an impact on the eventual outcome”.

According to banking sources, the Lloyds protocol is that calls should be spread over a few days, and limited to three to any one phone number, and complaints have to be reviewed fairly regardless of whether contact has been made.

Mr Begg says RBS has also tightened up its policy. “Up until February last year when we asked RBS for a file we would get files back from retail banking, the credit card division and the mortgage division, and would often get paperwork going back 20 years. That allowed us to be really accurate when putting in a claim.

“Then RBS started phoning clients and asking why they wanted all the information, suggesting Beat the Banks didn’t really need all of it, but they would send it direct to the customer. That put lots of people off.”

Then Mr Begg was told that the bank had disbanded a team at Gogarburn and would now only be providing basic information on print-outs, and application would have to be made separately to three departments.

Call-handlers discussing a claim appeared to have the detailed information in front of them, though it was not being made available to the customer or the claims company.

“In some cases where the print-out has shown no PPI we have insisted on a file. In one case a customer had actually paid out £5000.”

A spokesman for RBS said: “We work closely with customers and claims management companies to Improve the complaints process, to make it more efficient for our customers. We are aware of Mr Begg’s concerns and we are engaged in on-going dialogue with him to address these concerns”.

Lloyds Banking Group said: “We handle all PPI complaints in a consistent and fair way, regardless of whether they come to us direct from a customer or via a claims management company.”