The Financial Services Authority has allowed more time for banks to deal with claims for PPI refunds due to a backlog of claims developing over the past few months.
According to the Financial Services Authority´s guidelines, the time for banks to deal with claims for PPI refunds is limited to eight weeks. However, a number of banks put claims for PPI refunds on hold during the recent judicial review in case the outcome of the legal challenge reduced their liability for PPI compensation.
This temporary hold resulted in a substantial backlog of PPI claims at Barclays, Lloyds and HSBC; and the three banks appealed to the Financial Services Authority to allow more time for banks to deal with claims for PPI refunds. The city watchdog agreed to the request, but only on the condition that consumers are made fully informed of the additional delays to the processing of their claims.
The new schedule for the handling of PPI complaints and processing of PPI refunds is as follows:
- Claims for PPI refunds put on hold while the judicial review was in progress must be dealt with by the end of August.
- Claims received by the banks since the judicial review, but before the end of August, must be responded to within sixteen weeks.
- Claims received from the 1st September until the 31st December 2011 must be attended to with twelve weeks.
The Financial Services Authority expects the time for banks to deal with claims for PPI refunds to return to eight weeks after the 31st December, and this new schedule for handing and processing PPI claims only applies to the three banks that made a request to the Financial Services Authority (Barclays, Lloyds and HSBC). All other credit providers must adhere to the existing time for banks to deal with claims for PPI refunds.
Margaret Cole – the FSA´s Interim Managing Director of the Conduct Business Unit – said: “We want to see all PPI claims for compensation dealt with swiftly and appropriately. However some firms are facing a huge backlog and now a surge of new complaints which has created a bottleneck. It is not in the interests of consumers to receive further poor handling of their complaints as a result. This temporary extension means that these firms can process these complaints properly and fairly”.Read More