Beginning of the end for the PPI saga

Posted by Ian Carpenter in Banking on 4 September 2013 - Ian is Operations Director at checkmyfile

UK banks have been hampered by ongoing Payment Protection Insurance (PPI) claims for some time now, but there are signs that the burden is beginning to subside.

The first six months of 2013 has seen the number of overall general banking and PPI complaints against Lloyds Banking Group fall by 36%, compared to first half of the year in 2012.

The Financial Conduct Authority (FCA) reports that the volume of complaints, defined as those not resolved within one day fell from 860,026 to 548,403. Despite the notable improvement, the group - which includes Halifax, Lloyds TSB and Bank of Scotland - still lags behind Halifax which receives fewer banking complaints than any other major bank or building society.

Martin Dodd of Lloyds Banking Group explains the turnaround, “The commitment to do a better job for our customers is focused on delivering outstanding customer service. We’re pleased that our significant progress has continued in the first half of this year. We’ve set ourselves a series of challenging targets, and we want to keep delivering in line with our progress so far. The only way we’ll do this is by listening to our customers, putting things right if they have reason to complain and, most importantly, fixing those things in the first place.”

The drop in complaints is largely down to a 30% reduction in general banking grievances. PPI still accounts for 81% of all Lloyds Banking Group’s complaints, although this has dropped by 283,255 (from 85%) over the last year.

An FCA report reveals that the UK’s five biggest banks were receiving 13,000 PPI complaints every day last year so it’s no surprise that they have already peaked, with press attention gradually moving on to other banking misdemeanours.

It is too early to say whether the PPI scandal is over, but the pressure on the major banks is certainly easing. The number of PPI based complaints is likely to steadily drop to more manageable levels over the next few years, but the damage done to the reputation of the UK banking industry will take a lot longer to fade away.

Ian Carpenter is Operations Director at checkmyfile, has a degree in Business Studies, and is a Graduate Member of the Institute of Credit Management. He can be contacted at ian.carpenter@checkmyfile.com

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