Northern Rock, the taxpayer-owned bank, has been accused of stalling on payouts to customers missold payment protection insurance (PPI).
Tens of thousands of consumers are lodging complaints with lenders, insurers and other firms for mis- selling PPI, which helps meet credit card, mortgage and loan repayments in the event of accident, illness or unemployment.
But Brunel Franklin, a claims handling company, says it has noted a “worrying” trend in its cases against Northern Rock. “Many complaints are automatically rejected,” said Sally Bowyer, managing director of Brunel Franklin. “Then, when the case is appealed to the Financial Ombudsman Service, Northern Rock seemingly acknowledges the missale and the customer is, in theory, eventually paid the compensation they are entitled to. Northern Rock should uphold the vast majority of these cases. The FOS’s involvement is a total red herring.”
The Northern Rock claims come after the ombudsman accused some PPI firms of “deliberately obstructing” and “wilfully mishandling” legitimate complaints.
Brunel Franklin says other PPI providers were using tactics such as delaying payouts or trying to settle claims with early goodwill payments. But it says Northern Rock was the only firm “automatically” rejecting complaints.
Northern Rock said the claims were “totally incorrect”. “We do not automatically reject PPI complaints,” it said. “All complaints received from our customers are considered individually”.
