PPI Madness – Shelter from the storm. PPI Madness continues with the ‘not sold’

Lloyds has set aside yet more money, a further £1 billion in fact to cover its payment protection claims. It has also made provision for £2.07billion (yes billion) to be set aside to cover a positive tsunami of potential PPI claims on their way.

Barclays saw profits hit after making provision of some £850m to compensate for miss-sold PPI. In total they have stockpiled £1 billion this year as they are seeing “higher than previously anticipated levels of PPI claim volumes.

The complaint numbers are simply staggering. RBS/ NatWest received 365,000 PPI complaints from January to June. HSBC had 170,064 complaints and Spanish bank Santander said its complaints rose by 42 per cent this year.

How did this get so bad?

Did nobody spot the warning signs, did nobody see that policy restrictions would mean that so many would never see a successful claim outcome.

PPI miss-selling is a disgrace to the financial services industry, furthermore it has fuelled a sub class of ambulance chasers who now feed on the ‘not-sold’– those who have never even had such a policy.

An example of this arrived in text form on my wife’s phone on the 30th October, it said:

“Records passed to us show you’re entitled to a refund approximately £2130 in compensation from miss-selling of PPI on your credit card or loan. Reply INFO or stop”

It came from a mobile, probably based in India or Spain; 07760 7377. My wife has never had such a policy.

Anthony Bolton, Principal Officer, Claims Management Regulation Unit at the MoJ provided some good advice on dealing with these texts:

Don’t reply to the text message. The messages are usually sent in their thousands by data farmers trying to establish which numbers are live, so don’t respond to the number at all (not even STOP or anything not as polite) as this may result in a whole host of other marketing texts/calls (not limited to claims management).

Our difficulty here is identifying who is behind these messages. Different people can be behind the sending of the message, receiving any responses and those who follow them up (the data being sold on). We are currently working with the Information Commissioner’s Office, OFCOM, the Direct Marketing Association and the network operators to tackle the issue.

There are a couple of things we recommend people receiving text messages to do;


  1. 1.            Forward the text message to your (wife’s) network operator who will use this information to try to disable the number it came from. The operators have come up with a short code number to forward messages to. It is 7726 on most networks (or 87726 if it is Vodafone).
  2. 2.            Provide the information to the ICO via their online survey https://www.snapsurveys.com/swh/surveylogin.asp?k=134674895144. They are acting as the intelligence hub for this type of activity and possess the powers to deal with those breaching the Data Protection Act and the Privacy & Electronic Communications Regulations.

 The ICO have identified a number of targets and we are awaiting their final decision on the first notice they have issued re. their intention to fine two individuals in excess of £250,000. The story got a bit of publicity a few weeks ago and we hope that this will be a significant step in tackling the problem (http://www.ico.gov.uk/news/latest_news/2012/illegal-marketers-set-for-six-figure-penalty-01102012.aspx).

I will also make a note of the text on our system to see whether this ties in with any other information we hold to help identify the sender”.

Where does the blame lie? Well I guess with the architects and manufacturers initially, mostly banks, and then to the incentivised sellers who need to ship the ‘product’ to an unsuspecting customer.

As Dylan sang “Well the deputy walks on hard nails and the preacher rides a mount. But nothing really matters much it’s doom alone that counts”

And that doom now extends to a sub-class exploiting an almost unregulated marketing opportunity of the very worst kind. As they say, out of adversity comes opportunity in this case the ‘not-sold’?

PPI clearly falls into the realms of regulation, where was the regulator while this multi billion pound toxic mess was being incubated? If there was ever an example of a product that needed regulatory approval- a licence to say ‘fit for a defined purpose’, this is it.

You can learn a lot here on how the MoJ deal with spurious CMC complaints, a simply huge problem.


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