Recently, the Financial Ombudsman Service proposed a no-claim payout proposal to authorities regarding PPI claims. The new setup, if enforced in the future, will allow customers to get compensation without having to make a PPI claim. The move was made as banks were still delaying and rejecting customer claims, which FOS chief Natalie Ceeney states as “dragging their feet” to deal with the situation.
With no-claim payouts, there will be no need for settlement. Banks will be working directly with regulators in identifying customers who might be ineligible for insurances or certain financial products they currently have and will be refunded or compensated immediately. The FOS says that it can save time and hassle for all sides.
Currently, the Financial Ombudsman is handling 1,500 PPI claims on a daily basis. It has expanded its activities, has rented contractual spaces and personnel to cope with the large number. Recently, it has reached 500,000 claims halfway towards the end of the year.
The current PPI bill of the United Kingdom rests on £13 billion, with Lloyds having a total of £4.3 billion, Barclays with £2 billion, RBS with £1.3 and HSBC with £1.1 billion. Analysts mention that the amount can still rise up to £16 billion to fully compensate the entire United Kingdom’s mis sold.