What You Should Know About Lloyds PPI Claims
If you know anything about the PPI claims scandal – and let’s be honest: it’s hard to avoid – then you have probably noticed a recurring theme amongst one of the top banks, and it’s not a good one, Lloyds PPI claims make up nearly 50% of the market.
Lloyds are consistently topping all the wrong charts for mis-selling and mis-conduct. It’s worth remembering of course that the bank was in dire financial straits before being bailed out by the taxpayer for nearly £20 billion, which makes the upcoming facts and figures harder to fathom.
Lloyds PPI are quite unique in comparison to other lenders.
Refinanced Lloyds Loans and The Compound Theory
Let’s say you were given the option of taking £1,000,000 in cash right off the bat, or pocketing a penny, which doubled each day for the next month, which is best?
You’d take the cool million, right?
Well this is actually not the right choice. The penny seems small at first, but doubling up every day means that by the 30th day you’ll have raked in an even cooler £5,368,709.12 to call your own.
That’s exactly what compounding is.
If you’ve ever financed a loan that had a PPI policy attached to it then it’s a very important analogy. Many of those who took out a loan in the past ended up having to refinance at a later time – sometimes even a few times.
Many of those affected by PPI were completely unaware of the effect that PPI has on their financial situation. This is because, more often than not, they’ve had to pay huge amounts for PPI from the initial loan – even if PPI wasn’t applied to any subsequent loan.
What Does This Mean?
Let’s say you took out your initial loan with Lloyds, which had a PPI policy attached to it. Then after a year or two, you had to refinance the loan, which did not have a policy attached.
If you made the claim on the first loan, you would probably assume that you wouldn’t expect to receive anything from the subsequent loans. But in many case, we found that’s not actually the case.
The thing we’ve noticed is that Lloyds PPI claims from the first loan has been put together in the refinanced second loan – even though it is clear there is no PPI attached.
This means that every repayment you’ve made on the second loan has included an element of PPI from the first loan.
We’ve had quite a few clients that have refinanced their loans up to five times. What we’ve learnt from this is that customer have been paying for PPI on each loan, even though there was no PPI attached to the insurance! The direct result of this is that we’ve been securing refunds on multiple loans due to ‘residual PPI’ and the massive amounts of interest.
What’s the Average Refund for Lloyds PPI?
You’ll probably hear quite a lot about the average PPI payout statistic, which is currently just over £2,000. That figure is the average across the entirety of the industry. That is a representation of both those who are claiming alone and PPI companies claiming on behalf of individuals.
From general industry figures and from our own observation, we can see a higher than average pay out against Lloyds.
Further Reading: What is the average PPI refund?
This is how Channel 4 reported the scandal.
Your own claim is very much dependent on varying factors, so in order to get a good idea of the amount you could be owed, it’s best to run your claim through a PPI refund calculator.
Or for more accurate results start our free PPI checker and benefit from the advice and experience of a seasoned professional with extensive experience in the industry.
Lloyds Complaints the Statistics
The Financial Conduct Authority and the Financial Ombudsman Service produce figures every six months.
The data that we’ve studied considers data from the Lloyds Banking Group as a whole which includes its umbrella companies.
- Bank of Scotland PLC
- Black Horse Limited
- Cheltenham & Gloucester PLC
- Clerical Medical Investment Group Limited
- Halifax Share Dealing Limited
- HBOS Investment Fund Managers Limited
- Lloyds Bank PLC
- Lloyds TSB Bank PLC
- Lloyds TSB General Insurance Limited
- Lloyds TSB Insurance Services Limited
- Scottish Widows PLC
- St Andrew’s Insurance PLC
Lloyds Complaints – Total Figures
It’s worth remembering that these figures encompass all kinds of insurance, as the FCA do not class PPI as a separate category.
The following figures are from the period 1st January 2010 – 30th June 2015.
- Total Number of Complaints – 4, 196, 149
- Number of Complaints Closed – 4, 132, 473
- Backlog – 63, 676
- Number of Complaints Upheld – 2, 804, 171
- Number of Complaints Rejected – 1, 328, 302
- Uphold Rate: 68%
- Rejection Rate: 32%
The Times Article
A few years back an article was published in The Times about an undercover journalist being trained as a PPI claims handler at Lloyds.
The report detailed:
The reporter was told that sales people at the bank had forged PPI agreements on loan sales.
Recruitment execs told potential claims handers that some sales staff ticked blank opt-in boxes on loan agreements, in order to add PPI onto loans without the customer knowing.
Complaints staff were told to ignore any notion that salesmen forged loan agreements.
The recruiting staff then told prospective employees that they should treat all PPI applications as though they were genuinely completed by the customer – even with the knowledge that they were often forged.
In another part of the training, recruits were told that many customers wouldn’t pursue their PPI claim once the bank had rejected it the first time around.
Our experiences with Lloyds PPI claims over the years seems to be in line with this. It isn’t uncommon for some companies or individuals to have to log a service complaint with the FOS due to the poor management of the claim.
Essentially this means that the person issuing the complaint is asking the FOS to provide additional compensation on top of the refund, and this is to compensate for the inconvenience and added stress of poor PPI complaints handling.
How Do Lloyds Mis-Handle the Claims?
Lloyds have often been known to ask for something to be completed before allowing the process to begin. Once this gets completed and a receipt has been handed over, you’d expect the process to begin. However, a few weeks later Lloyds will come back to the customer asking for exactly the same thing again. Any query will then result in a flat out denial that the process was ever started in the first place.
Whilst it isn’t fair to claim this happens routinely on every claim, it can of course get very frustrating when it drags on and on. If the FOS were to agree that this is poor handling practice, then they would instruct Lloyds that extra compensation must be paid.
Is Claiming PPI as Hard as It Seems?
In some cases, especially older ones, it can be. There’s no way to realistically tell if your claim will encounter any of the aforementioned issues or whether it will be straightforward or not.
If you’re thinking about making a Lloyds PPI claim alone, then bear in mind the potential pitfalls previously mentioned. On the other hand, if you’d prefer to get your money back and have a seasoned professional deal with your account, so you avoid the initial hassle then contact us today.