Barclays slated over PPI refunds

Over recent months there has been a great deal of controversy over the sale of Payment Protection Insurance in the UK, with companies being accused of mis-selling this type of cover and pressuring borrowers to take it out even if it was not really appropriate. Failure to provide adequate information on these policies was another point that was mentioned by regulators. However, Barclays Bank has now been slated for failing to act appropriately with regards to issuing refunds on cancelled policies.

Consumers have been paying a fortune for their payment protection insurance policies in many cases, and upon cancellation of the policies refunds have usually been very low. As a result of this new regulation were recently introduced in the UK to ensure that the refund given to consumers on cancelled PPI policies was fairer. However, Barclays has allegedly still been offering refunds that are way below average on these cancelled policies despite the regulations having been in place for a number of months.

One the other hand a number of lenders started taking on board the new regulations prior to them being enforced, and therefore many consumers with other lenders have received far fairer refunds upon cancellation of their payment protection insurance policies.

Once Barclay's customers explained how she had taken a loan out for £25,000 and was charged £6000 for payment protection insurance, which was added to the loan. However, when she cancelled the policy after just seven months she received a refund of under £2000, which meant that seven months cover had cost her over £4000. When she complained she was told by Barclays that the terms of the PPI and any refund policies had been explained to her when she took out the loan and cover.

Tom Smith
25th July 2007