The British Bankers’ Association is in discussions with the financial regulator as part of plans to deter customers from using claims-management companies when seeking compensation for wrongly sold loan insurance.
In addition to the Financial Services Authority, the BBA is also working with its members regarding the handling of complaints, the London-based lobby group said in an e-mailed statement today.
British banks have set aside about 11 billion pounds ($17.6 billion) to compensate customers improperly sold payment protection insurance with mortgages, loans and other credit. Claims-management companies, which help customers pursue compensation for a fee or percentage of any award, have inflated the cost of recompense and more than half of claims from some firms are bogus, Lloyds Banking Group Plc, Britain’s biggest mortgage lender, said last week.
“The on-going work focuses on three issues as a priority: addressing backlogs, making sure that customers can be confident that the offers they receive are right and highlighting that there is no need for them to engage a claims management company,” the BBA said in the statement. “We are involved in on-going discussions with the FSA to clarify the parameters of their complaints handling guidance.”
The BBA is lobbying the FSA to say that the amount of time consumers have to make a claim should be limited because it is now widely known about by the public, Sky News reported earlier today. BBA spokesman Brian Mairs declined to comment.
-- Editors: Jon Menon, Keith Campbell