Those making claims for PPI mis-selling may now face further frustration after it was revealed some of the UK’s largest lenders have compensation delays of several weeks. Barclaycard and RBS are among those currently working with backlogs meaning compensation is taking up to six weeks to issue.
The compensation delays are likely to be particularly frustrating for those already caught up in the Judicial Review which saw some complaints put on-hold for several months. The Judicial Review was completed in April, but many of the largest lenders have been faced with significant backlogs of complaints. As a consequence, lenders including Barclays and HSBC were granted a temporary extension to the normal timeframe allowed to investigate complaints from the usual eight weeks up to sixteen.
Although there are no specific Financial Service Authority rules as to how long it should take for compensation to be issued it is generally accepted that it should be received within four weeks and this is the timeline that most lenders work to.
The news of the compensation delays is disappointing for many who had hoped lenders would streamline their claim processes in the wake of the High Court Review and issue compensation in a prompt manner. Given that some of the largest lenders have allocated billions of pounds to dealing with the issue of mis-sold payment protection insurance it is unfortunate that customers are still being failed. The recent delays are likely to be only a temporary glitch; however, given the huge backlogs created by the Judicial Review and hopefully, moving forward, there will be no further compensation delays.
The good news for those affected by compensation delays is that most lenders calculate interest up until the point the payment is made. This means that customers should not be financially harmed by the delays.