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ppiclaimlineuk

PPI News Update: UK banks will be reopening millions of pounds in PPI settlements.

The UK Financial Conduct Authority (FCA) pressed to enlarge the range of the payment protection insurance (PPI) misselling investigation still additionally today by ordering UK banks to revisit 2.5 million criticisms that may not have been correctly managed.

At the very least this stage the banks should have responded. Quitting misselling, investigating their sales teams and refunding those impacted. But billions were being made by them - so they did not, they fought with it rather.

The first fines began rolling in the next year, their sales teams did not actually quit.

The most recent news is that 2.5 million gripes from consumers will be re-investigated after being initially rejected.

And in addition to all the compensation they are paying out, this scenario has created a fresh issue for banks - claims management companies. Where once salesmen cool-named offering insurance, currently claims management companies call, e-mail, text and advertise to anyone they've contacts for, telling you they will get you your insurance premiums back.

Innumerable bogus claims are issued. Some 97% of the claims were from individuals who'd never been customers there. In 2012 rogue claims management companies filed more than 22,000 phony claims for PPI in six months, and that is only the fraudulent claims.

Other banks told set with 50% or more of claims coming with one case in three and from direction companies from folks who have never banked with the business they're asking for cash from.

Other sources say the claims can come with a risk. The claims management companies understand that if the bank wins its case, it is going to cost it hundreds of pounds, by threatening to take cases to the Ombudsman. A claim that was beefed up might be paid or a case that was moot brought - costing cash and time to the Ombudsman and banks.

This is something the Ombudsman supported - with a "growing variety of cases where, after investigation, it emerged that no PPI coverage had ever been in place".

The banks are not only paying compensation out, they are paying Ombudsman fees, admin prices, the total cost of the suits, the fines out from grievances handling fees, the regulator and more.

Processing a claim - a deceptive one - costs hundreds of pounds if it goes to the Ombudsman. And a million cases have.

The estimated amount for the sector overall is now GBP20billion.

If they had only acted subsequently - quitting the malpractice, inquiring, contacting customers in danger and paying the cash back - they saved us from claims management companies and would have saved themselves billions in the long run.

It'd have been the right thing to do, also.

In total, more than 13 million PPI criticisms are managed since the procedure started with GBP16 billion in compensation, in 2011.

Of criticisms that were discarded, about a quarter have later gone to the Financial Ombudsman Service.

In addition, it criticised decision making on the quality and clarity and some kinds of PPI criticism of choice letters sent to convey a redress choice. The six companies that have received 80% of all PPI grievances should submit attestations from their senior executives to admit they've corrected their difficulties, the FCA included.

Several moderate-sized businesses also have been found lacking. Outside reviews at these (unnamed) companies are under way.

The new drive to bring in more misselling cases could lead to another rise in the rate at which cases are filed, with the monthly amount of new cases not anticipated to return to today's degrees until the end of 2015 at the earliest. Michael Isaacs, national head of banking and finance litigation at the London law firm Pinsent Masons, remarked: "For banks already extremely burdened with regulatory focus and redress schemes across their businesses, the reopening of grievances that was thought of as coped with will put additional stress on already stretched in house redress teams. Happily, many banks are at present skillful at the procedures included and the up-scaling of procedures that may be needed.will need to see if there is another round of provisioning in result of this though."

And a further increase could be on the way: in addition to the 5.2 million high risk customers who've already been contacted or will be shortly, the FCA said it was contemplating making banks contact every PPI customer in the UK to advise them of the misselling danger.

Don't be the product, buy the product!

Schweinderl