How Has PPI Affected Barclays Bank?
Customers have been sold PPI since the 1970s. Millions of policies were mis-sold over the years, using a variety of methods. Barclays Bank, part of the Barclays Group, it has been established are one of the big lenders complicit in mis-selling PPI. Millions of pounds have been set aside by Barclays to pay their customers who were mis-sold PPI.
As of February 2018, Barclays bank were in second place out of the big UK banks having paid out £9.3bn so far in recompensing their customers for mis-sold PPI.
Barclays Bank have not been fined for any wrongdoing by the FCA when dealing with PPI complaints, however, Egg Credit Card, part of the Barclays Group was fined £721,000 in December 2008.
In this guide:
- What is PPI and How Does it Work?
- Were you sold PPI by Barclays?
- What Products Did Barclays Sell PPI With?
- Did Barclays Mis-sell PPI?
- How Do I Know If I had PPI on a Barclays Product?
- How Was the PPI Scandal Revealed?
- What Was Barclays Response To The PPI Scandal?
- How Long Do I Have To Make A PPI Claim With Barclays?
- What Could I Be Entitled To If I Was Mis-Sold PPI?
- Information Required to Claim Against the Barclays Group
- How Do I Start My Barclays PPI Claim?
- Does the Plevin High Commission Ruling Affect My Barclays PPI Claim?
- Next of Kin Mis-sold PPI Claims
What is PPI and How Does it Work?
PPI isn't a complicated product that is hard to understand. Very simply, PPI is an add-on insurance product that is optional to buy when taking out a mortgage, loan or credit card.
If sold correctly, PPI is a useful product. It covers the repayments on any of the above finance products, when you can't make them yourself. This may be due to being made redundant or not being able to work due to an accident, illness, disability or death.
Policies and the benefits will vary from provider to provider, so it is important to read the small print to know what you are getting and what the exemptions are.
However, PPI was often mis-sold to people who didn’t want it, didn’t need it or couldn’t have used it because exclusion clauses built into the policy prevented a claim being made.
Were You Sold PPI By Barclays?
If you are one of the many people who took out a loan, mortgage or credit card with Barclays over the last decade, it is possible you were sold PPI. Due to the nature of the mis-selling scandal, it wouldn't be uncommon if you didn't know you had it.
As already mentioned, Barclays is one of the most complained about banks, certainly in terms of PPI mis-selling. The company has set aside a substantial sum to pay compensation for successful PPI claims.
What Products Did Barclays Sell PPI With?
Check the list below, if you’ve had any of the products below from the Barclays Group, you could have been mis-sold PPI with these:
- Credit cards with PPI
- Personal loans with PPI
- Mortgages with PPI
- Secured loans with PPI
- Overdraft with PPI
Did Barclays Mis-Sell PPI?
Once lenders realised how lucrative PPI was, several tactics were used to mis-sell PPI. Sales advisers were encouraged to sell PPI policies in return for a commission on the sale.
Tactics used to sell PPI policies include:
- Being unaware – many customers did not know that the PPI had been added to their product. Therefore, not only were they repaying their loan, they were also paying for an insurance policy they had no knowledge of.
- No option – sales advisers didn’t tell customers that PPI was optional, i.e. they didn’t have to have it. Customers were told if the PPI policy wasn’t purchased the loan would not be approved.
- Couldn’t ever claim – the policies had been sold to customers who would not be covered by its provisions, so could not have claimed on it if their employment status changed.
- Underhanded – some sales advisers used tactics that were ethically and morally questionable when selling PPI policies. This included telling customers of the things that could go wrong if they didn’t take out the cover.
- Pre-existing conditions – most PPI policies do not cover people with pre-existing medical conditions. Sales advisers made no attempt to find out if the customer had any pre-existing conditions or if they had another policy.
- Commission – the customer was not told that part of the premium price was paid to the lender, bank or broker as commission.
- Pressure sales – customers were pressured into taking out PPI by sales advisers.
If any of these situations arose when you bought the PPI, you were probably mis-sold.
How Do I Know If I Had PPI on a Barclays Product?
Your documents may not specifically state PPI as it is also known by a variety of other terms. If any of the following terms appear on your documents it may be PPI:
- Loan care;
- Payment cover;
- Protection plan;
- Loan protection.
How Was the PPI Scandal Revealed?
Banks, building societies and other financial services providers sold PPI to customers to safeguard against being unable to work due to an accident, sickness or unemployment and not be able to meet their monthly repayments.
The insurance itself is a useful product, when sold in the right way, and is beneficial to those who meet the requirements to claim successfully.
However, it came to light that many people sold PPI, would not be covered by it if they ever needed to claim.
Sales of PPI policies rose as financial institutions realised how much profit could be made - they were netting billions each year and paying out very little. This went on for years until the Citizens Advice Bureaux (CABx) looked further into why out of all the policies sold, so little was paid out.
The CABx published their findings in 2015 and concluded that PPI was in effect a ‘protection racket’ and they lodged a ‘super complaint’ with the Office of Fair Trading.
The report highlighted that for an expensive product only 15% of consumers would be successful in making a claim if the need arose.
At the same time the then UK regulator, the Financial Services Authority (FSA) launched their own investigation. They found poor PPI selling practices and little compliance control. What nobody could predict at that time was the scale of the mis-selling, the way it would be exposed and how much money was involved.
What Was Barclays Response to the PPI Scandal?
The Barclays Group earned millions from mis-selling PPI policies.
Investigations by regulators revealed the extent of the mis-selling scandal and it became public knowledge. This intervention forced The Barclays Group to compensate its customers.
They wrote to all the customers who were sold PPI policies. It was then up to the customers to contact Barclays with the details of their policy.
This resulted in their website having a section dedicated to just PPI and how customers can make a claim.
How Long Do I Have to Make a PPI Claim With Barclays?
The FCA set a deadline of 29 August 2019, by which all claims for mis-sold PPI must be made by. You need to act quickly!
This deadline has influenced the number of claims submitted to Barclays as more people become aware of it.
Latest figures from the FCA show that there is an increase in the number of claims being processed and payments awarded. Since July 2017 there has been a month on month increase in the amount of payments awarded to mis-sold PPI claimants.
What Could I be Entitled to if I Was Mis-sold PPI?
If you establish you were mis-sold PPI by Barclays, you may be entitled to:
- A refund of the premiums paid;
- Any interest charged being refunded;
- Compensation of interest at 8% per year on the sums from the first two points.
Other factors may affect the outcome of your PPI claim with Barclays and what you may be entitled to, such as:
- How many accounts you have with PPI – which types of credit agreements you have, how many and the value will affect the outcome. Multiple accounts with PPI means you would have paid out more in premiums so you will be looking to claim these sums back;
- Credit card accounts – the PPI added each month to your credit card statement is a percentage of the outstanding balance. If your balance was always close to the limit on your credit card, you could expect a reasonable amount back when you claim for PPI compensation;
- Length of time you had the account – the longer you’ve had the account and paying the PPI premiums the more you will get back when you put your claim in.
Information Required to Claim Against the Barclays Group
If you think you have a claim against the Barclays Group for the mis-selling of PPI, you will need to provide as much information about the policy you had. The following information will speed up the processing of your claim:
- Policy numbers of your PPI account(s);
- Dates of when the policy was taken out and its duration;
- The way the policy was sold to you;
- What your employment status was when the policy was sold;
- Whether or not you had any savings or other insurances in place when you took out the policy;
- The reason for taking out the finance and how much you paid off.
How Do I Start my Barclays PPI Claim?
We’d like to discuss the details of your case with you, so your complaint can be lodged with Barclays on your behalf as quickly as possible.
- Start your Free PPI check process by using our online form. Completing the required information will help to establish if you have held a policy with Barclays; or
- Complete our online claim form to start your claim.
How long does the claims process with PPIClaims.com take?
Claiming PPI with PPIClaims.com starts with a pre-submission stage. From the time of the request being sent to the lender, to getting a response that determines your PPI status, will take on average six weeks.
The average time frame for a claim after getting an acknowledgement from the lender to getting a decision is approximately 8-16 weeks.
Does the Plevin High Commission Ruling Affect My Barclays PPI Claim?
Barclays along with other banks and providers are paid commission by an insurer for the sale of PPI policies.
High-levels of commission is when you’ve paid more than half of what you’ve paid for the PPI policy.
The FCA introduced new rules in March 2017 after a Supreme Court ruling in the case of Plevin v Paragon Personal Finance March 2017, which outlines how PPI commission complaints are to be dealt with.
It states that if the commission paid is over 50% of the price of the PPI, the claimant is entitled to the difference back plus interest.
Since the Plevin ruling, customers can complain about the level of commission paid for, that was not previously disclosed when the policy was sold to them. If the commission was high you may be entitled to compensation regardless of if you were mis-sold the PPI or not.
Another case, Doran v Paragon Personal Finance June 2018, was decided by a District Judge in a County Court. He awarded the claimants all their high commission payments back plus interest.
The case of Doran does not set a precedent, like the Plevin case does, as it was decided in a lower court and may yet be appealed by Paragon Personal Finance.
Customers who have successfully claimed for mis-selling cannot claim again under the Plevin rules. This will still be the case after the recent Doran decision. Lenders will only consider claims for undisclosed commission if the customer was rejected for a mis-sale.
If you feel that you have paid high commission for a PPI policy, you may be entitled to compensation, please complete our online PPI High Commission Check Form.
Next of Kin Mis-sold PPI Claims
An area of mis-sold PPI that is often overlooked because many people do not know about it is claiming on behalf of a deceased spouse or other family member who has passed away. For example, if you knew your spouse was paying for PPI before they passed away and you have concerns if it was mis-sold, you should find out as you may be entitled to claim it back.
Each month a sum of money was paid for a PPI policy that covered the policyholder should they repayments become unaffordable because of illness, accident, redundancy or death.
The PPI policy would have been sold by a bank, building society or other financial provider such as an insurance company or broker.
There have been many cases of banks, lenders and other providers selling PPI to customers who would never be able to claim on it.
The are several situations that could apply to your spouse or family member that would make them ineligible for PPI. These include:
- Having a pre-existing medical condition or if someone was;
- Being self-employed or retired at the time of taking out the cover;
- Public sector workers, civil service workers and those in other similar employment may have protection through their employment contracts, so did not require PPI;
- Some customers were not aware that they had PPI as it was added on with their consent or knowledge;
- Customers being led to believe the PPI cover was compulsory when it was optional, indicating that they didn't understand what the cover was for.
If you know or suspect that any of the above situations applied to your late spouse or family member, look further into it as there is a strong possibility that the PPI was mis-sold.
Here's what you need to do:
- Establish if your spouse or family member was paying for PPI on a credit card, loan or mortgage.
- Try and work out if the PPI was mis-sold based on the situations described above.
- Decide how you want to pursue the claim: yourself or by using PPIClaims.co.uk. By using PPIClaims.co.uk we do all the hard work, so you don't have to.
If you think there may be PPI on any loans or credit agreements that were take out by a deceased spouse or family member it is worth getting a FREE PPI check done to know for sure.