Payment Protection insurance (PPI) is in the news again with the UK financial complaints service, the Financial Ombudsman Service (FOS) reporting that its first quarter was the busiest ever with over 81,000 complaints – more than double the number received in the same period 2010.

Payment protection insurance, such as mortgage protection insurance, was the main reason for this substantial increase and the FOS have been receiving on average over 900 PPI cases each day.

Banks and others are already reporting record numbers of new complaints and it will be some time before we see the impact of those on our figures. So it’s difficult to tell whether we will be seeing still higher numbers yet – or whether the figures will now start to decline.

Tony Boorman, principal ombudsman at the FOS said, “When we come to publish the results for the next quarter, I expect the position on PPI will have changed again.”

“With complaints-handling rules ‘waivers’ agreed by the Financial Services Authority, the rate of new PPI cases has slowed – for the moment at least. ”

And the efforts by many banks to clear the backlog of cases that has built up should see record volumes of cases closed, and high uphold rates.

Bad Banks

Unsurprisingly, the bulk of complaints have concerned PPI after the banks lost an appeal on a ruling to pay back the policies in the High Court earlier this year. The period also saw both the High Court decision on the PPI judicial review and the decision by the British Bankers’ Association not to appeal that decision.

Figures from some of the banks this week have revealed that the PPI saga is having an adverse effect on their balance sheets.

Barclays said that its profits had fallen by 33% compared to the first six months of last year, with a £1 billion provision for PPI claims largely to blame.

Results from HSBC also showed the bank has put almost £270 million to one side to deal with customers’ claims.

Lloyds Banking Group has also previously revealed that it has put £3.2 billion aside to pay possible claims. PPI was sold by banks on unsecured credit products such as loans, credit cards and some mortgage products.

Santander is the latest bank, and the last of the  big banks to cave in and to set aside money to pay the compensation bill. Santander owns Abbey Alliance and Leicester and Bradford and Binlgley has set aside £543 million for PPI  claims.

In April, the banking industry lost its High Court challenge to new rules on the sale of PPI.

Among other things, the rules require sellers of PPI polices to review all their past sales to see if their customers have a claim for mis-selling, whether or not they have actually complained.

While the legal case was going on the banks put on hold tens of thousands of fresh PPI complaints that came in.

Santander was second, behind Barclays, in the list of most complained-about financial institutions during the second half of 2010.

Related posts:

1. Insurance Brokers Pay for UK Banks PPI Claims
2. Payment Protection Insurance Claims cost Lloyds Bank £3.2 Billion
3. What a bunch of Bankers! UK Banks challenge PPI ruling

The guys over at the tradesman insurance quotes comparison site tradesman-insurance.com sent us it!

Watch!

Insurance Blog – keeping up the crusade against rip off banks that we are all paying for now in higher taxes and soon to be higher interest rates!

Someone should tell Cameron that he could get rid of the so called deficit if he sold the Banks that this Country owns!
However it suits his political purposes to line the pockets of his banking prep school chummies with Government money is the form of treasury bonds………

Related posts:

1. New Year Recession Fears
2. UK Unemployment hits record heights
3. UK Government CON DEM The FSA Insurance Regulator

So when Legal & General’s fund manager told a Commons Select Committee that it called for the CEO and Chairman of RBS to resign as early as May last year, we were all ears…….

According to an article in The Times

Peter Chambers, chief executive of Legal & General Investment Management (LGIM), told members of the Treasury Select Committee that its resignation demands had come as part of a concerted effort to “engage with” British banks during last year’s market storm

LGIM is the biggest investor in the stock market and owns about 5 per cent of every listed company.

Related posts:

1. Legal Expenses – Are you at Risk?

You can read about all this stuff on the news sites, but what particularly interest us is the way that the Goverment’s banking help package has helped put RBS to the sword!

Not content with sucking up 37 millon pounds of our money to own 70% of the company in the Autumn the Government looks like its bank bailout package has backfired upon the Goons who control RBS.

On the announcement of the latest rescue package the City has just responded with the biggest single corporate loss in UK history – RBS shares are currently down nearly 70% of their trading value this morning, making the bailout worth nothing!

Share trading has probably stopped by the time I’ve finished writing this.
Where this leaves RBS’s insurance arm which includes Direct Line Churchill etc. remains to be seen. Probably going to get snapped up very cheap by the likes of one of the big suitors that have been courting it for the last year.

Insuranceblogger would like to point out that we foresaw this months ago (read the posts) and incidently would like to see any none performing bank go to the wall. Whatever happened to the free market economy – Ha! Ha!

Now’s the time for 0% interest rates Mr Brown – great a free toxic mortgage!!!

Related posts:

1. Government take two thirds stake in RBS Insurance
2. Home Insurance wars continue
3. UK Banks to further reduce public lending

The government will pay £15bn for the majority stake in the troubled bank and £5bn in preference shares following its bid of the UK’s biggest bank bail-out.

This bail-out will leave the long suffering taxpayers with an instant paper loss of £2.3bn, as RBS shares have recently been trading at a much lower share price than the 65.5p offer revealed last month.

In a bid to increase value for taxpayers and stop future politicians making business decisions about the running of banks, the government’s shares will be held by an independent UK Financial Investments Ltd. (Who are they?)

According to the newswires RBS has been trying to flog RBS Insurance all year to raise £7billion, prior to the banks recent troubles!

As part of The Royal Bank of Scotland Group, RBS Insurance is one of the largest general insurers in the UK, employing over 18,000 staff and incorporating many of the highest profile household names in the business, including Direct Line, Churchill, Green Flag and Privilege, amongst others.

Related posts:

1. Scottish Parliament to rescue Banks?
2. Uk government moves to protect bank deposits

At last some sense in the car insurance market from RBS owned Churchill Car Insurance.
Not only have they revamped their website to make it easier to use, they’ve actually come up with a car insurance policy that makes sense for couples and families everywhere.

NAMED DRIVERS EARN NO CLAIMS BONUS YEARS!

This is going to give Churchill a massive edge in the very highly UK competitive car insurance market particularly as in recent years the only sensible way to get a young person under 21 insured was to be as a named driver on the parents policy.

Current insurance companies who target young drivers will surely respond or suffer loss of business to a dog with bite!

Visit Churchill

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Or does it?

I’ve just heard A Darling say ‘we’ll do whatever it takes to keep the economy stable’

Maybe, the Yanks are right – You cannot underwrite a House of Cards Institutional collapse – especially if your not getting the profit in the good times.

Obviously the UK Government thinks you can!

When the Japanese banking system collapsed in 1990 the only solution was the introduction of ZIRP – Zero Interest Rate lending from the State to the Banks in order to kick start the circular liquidity flows. It took ten years to recover.

Maybe there’ll be a honeymoon periods in a month or so after Obama wins the US election handsdown.
It might even help Mr Browns UK image, after all the Conservatives here (the republican equivalents) are marching around their annual conference here like headless chickens, triumphing the rise of New Conservatism and already talking about power.
Why the glum faces then?
These same people are being shot by both sides. The collapse of their beautified banking system and the value of their shares free falling, their system falling into the hands of the enemy (the current Government) has rather taken the shine of the promised election victory to come!

Well whoever wins it has just won a bucket of ****

Rumours are abounding that Lloyds board are trying to renegotiate the takeover of Halifax Bank of Scotland – its sending waves around the industry.

Well Mr A Darling it looks like you may have your first bank to nationalise….
It will probably be closely followed by Royal Bank of Scotland!

Hang on! – Whose in Charge? – a certain Scot Mr G Brown

Maybe he’s planning to hand the Scottish banks over to the Scottish Parliament to run

Now there’s a thought – Alex Salmon in charge of 2 of the UK’s largest financial and insurance comglomerates!

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