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  #1  
Old 05-02-2014, 04:40 PM
BOUDICCA BOUDICCA is offline
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Default Doubts About Mbna Ppi Redress Calcualtions

It has just come to light that there are numerous general consumers who have doubts about how MBNA Limited are calculating their Payment Protection Insurance (PPI) Redress. The methodology that MBNA have been and are using does not appear to conform to the rules as laid down by the 'Regulator', the Financial Conduct Authority (formerly the FSA).

A Group of concerned General Consumers have joined together by writing to the Chief Executive of the Financial Conduct Authority: Mr. Martin Wheatley and to the Principle Ombudsman of the Financial Ombudsman Service: Mr. Tony Boorman requesting their attention and direction.
The letter is as follows:

"Martin Wheatley
Chief Executive
Financial Conduct Authority
25 The North Colonnade
London
E14 5HS


(Identical copy sent and addressed to: Tony Boorman, The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR)

Dear Mr Wheatley

Request for direction for appropriate attention (redress calculations)
There is an upcoming problem that you may be unaware of, and I am asking you to consider the implications of this, and the corresponding evidence, to a proper degree of depth. I am, though, uncertain as to if this should be best addressed to FOS or FCA; as it may well be of equal interest to both, yet affects tens of thousands of people. To check this, please, can you let me know who the most appropriate person would be in your organisation to which I should be discussing this issue for proper consideration?

The essential problem is that FOS appears to have been inadvertently allowing a credit card issuer to systematically undercompensate around 25,000 FOS judged in favour of the consumer mis-sold PPI cases. These are people whom FOS have determined in favour of since June 2012, but allowed the firm to continue to self-report that they are following PS 10/12 compliance when calculating redress. The firm (MBNA) has been assumed by FOS staff to be following FCA and FOS requirements for redress calculation.

To a casual enquiry the firm may even look and report as if they were, while the firm is clearly evidentially not doing so. In comparison with what MBNA are required by PS 10/12 to do (as per examples given in that guidance, or a fair account reconstruction method), redress calculations are recently typically 30% to 50% lower. This non-compliance can be shown within a number of cases, using MBNA’s own documentation and reports.

We are a group of people with an interest in this, generally, and also from within that 25,000, and further also drawn from those of an order of magnitude larger number who were systematically undercompensated directly by MBNA without FOS involvement. All of those involved have individual hard evidence, supplied by the firm, of the firm’s “error-of-judgement”. This error lies within a management level of the firm encouraging non-compliant redress practices which are designed to appear, to an untrained eye, to be unfathomable yet possibly compliant (if they could be understood).

To check the validity of our assertions requires a degree of focus on the methodology used by the firm. This effort appears, understandably, to be beyond the apparent work requirement of an FOS Adjudicator at case level (and, according to some published DRN Decisions, beyond that of some Ombudsmen as indicated through some recent Decisions).

To understand what the firm is “doing”, requires that attention is spent on that particular task by someone who is competent to understand the structure and “intention” of the MBNA redress calculations, in comparison with DISP requirements. Once one understands the methodology (and results) of the MBNA calculations, it can be compared with what DISP requirements wording stipulates
Particularly pointed is the level of contrast to the relevant Appendix 2 Example 6 method. The firm’s method (since June 2012) varies in its results from PS 10/12 proper redress by selectively making unjustifiable “assumptions” and then varies substantially (and cleverly) in how redress is unfairly handled within calculations.

Around June 2012, a particularly imaginative revision was added to the firms VO20_ series of redress calculations, making subsequent versions up to this time, to now be well outside of PS 10/12 requirements. From this point the firm’s calculated redress is in many cases thousands of pound sterling below what either Example 6 calculates to, or as would be calculated using industry regulated correct standards, or using FOS licenced (Exasoft) Redress Manager, or a properly reconstructed account.

Where I am looking for your help, is to correct a misassumption. That miscomprehension is: that if a firm (MBNA in particular) reports to FOS that they have made (or will, as directed, make) an “FOS guidance compliant” redress calculation – then that this is, in error, assumed by FOS to be what they will do. This has not been the case with MBNA for over eighteen months - and tens of thousands of people have been affected. It appears that this firm may not have had their calculations properly checked since a time when a not altogether dissimilar situation was ordered recalculated in 2010.

It could also be said that there is a public risk that this assessment may fall in-between the remits of FOS and FCA, and potentially not be attended to by either. I would like your help to submit our evidence with a view to seeing if this can be avoided or corrected. If it would help, as a start, perhaps an initial five or ten examples, or more, of redress calculations made by the firm under this method could be forwarded to the appropriate individual that I am requesting takes a look at this complaint.

If you can point me to the right person to talk or correspond to, that would be very much appreciated. Our further communications can spell out the basic mechanics elements of why MBNAs redress calculations are not as per regulatory requirement – to give a checkable indication that our claim is not an empty one.

I hope to hear from you soon with your suggestions, and most appropriate contact point.

Best Regards

Yours sincerely,


Signature."

Anyone, who feels that they may have been affected by this issue or, is concerned by the manner in which MBNA Limited has been or is calculating their PPI Redress may use this template letter if, applicable?

Last edited by BOUDICCA : 06-02-2014 at 02:08 PM.
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  #2  
Old 06-02-2014, 04:38 AM
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Many thanks to Boudicca for this. I have been involved with researching this issue, and although I do not have a current claim with MBNA, I will be sending the above letter to the FCA & FOS heads nevertheless.
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  #3  
Old 06-02-2014, 09:59 AM
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I am sure MBNA is not the only lot doing this.
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  #4  
Old 06-02-2014, 01:59 PM
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Quote:
Originally Posted by Dragonlady View Post
I am sure MBNA is not the only lot doing this.
Agree DL!
But it is MBNA who is in the spotlight at the moment...

Hopefully, other members will send their letters into the FCA and FOS about the mis-calculations!?
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  #5  
Old 06-02-2014, 02:10 PM
BOUDICCA BOUDICCA is offline
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Quote:
Originally Posted by BOUDICCA View Post
It has just come to light that there are numerous general consumers who have doubts about how MBNA Limited are calculating their Payment Protection Insurance (PPI) Redress. The methodology that MBNA have been and are using does not appear to conform to the rules as laid down by the 'Regulator', the Financial Conduct Authority (formerly the FSA).

A Group of concerned General Consumers have joined together by writing to the Chief Executive of the Financial Conduct Authority: Mr. Martin Wheatley and to the Principle Ombudsman of the Financial Ombudsman Service: Mr. Tony Boorman requesting their attention and direction.
The letter is as follows:

"Martin Wheatley
Chief Executive
Financial Conduct Authority
25 The North Colonnade
London
E14 5HS


(Identical copy sent and addressed to: Tony Boorman, The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR)

Dear Mr Wheatley

Request for direction for appropriate attention (redress calculations)
There is an upcoming problem that you may be unaware of, and I am asking you to consider the implications of this, and the corresponding evidence, to a proper degree of depth. I am, though, uncertain as to if this should be best addressed to FOS or FCA; as it may well be of equal interest to both, yet affects tens of thousands of people. To check this, please, can you let me know who the most appropriate person would be in your organisation to which I should be discussing this issue for proper consideration?

The essential problem is that FOS appears to have been inadvertently allowing a credit card issuer to systematically undercompensate around 25,000 FOS judged in favour of the consumer mis-sold PPI cases. These are people whom FOS have determined in favour of since June 2012, but allowed the firm to continue to self-report that they are following PS 10/12 compliance when calculating redress. The firm (MBNA) has been assumed by FOS staff to be following FCA and FOS requirements for redress calculation.

To a casual enquiry the firm may even look and report as if they were, while the firm is clearly evidentially not doing so. In comparison with what MBNA are required by PS 10/12 to do (as per examples given in that guidance, or a fair account reconstruction method), redress calculations are recently typically 30% to 50% lower. This non-compliance can be shown within a number of cases, using MBNA’s own documentation and reports.

We are a group of people with an interest in this, generally, and also from within that 25,000, and further also drawn from those of an order of magnitude larger number who were systematically undercompensated directly by MBNA without FOS involvement. All of those involved have individual hard evidence, supplied by the firm, of the firm’s “error-of-judgement”. This error lies within a management level of the firm encouraging non-compliant redress practices which are designed to appear, to an untrained eye, to be unfathomable yet possibly compliant (if they could be understood).

To check the validity of our assertions requires a degree of focus on the methodology used by the firm. This effort appears, understandably, to be beyond the apparent work requirement of an FOS Adjudicator at case level (and, according to some published DRN Decisions, beyond that of some Ombudsmen as indicated through some recent Decisions).

To understand what the firm is “doing”, requires that attention is spent on that particular task by someone who is competent to understand the structure and “intention” of the MBNA redress calculations, in comparison with DISP requirements. Once one understands the methodology (and results) of the MBNA calculations, it can be compared with what DISP requirements wording stipulates
Particularly pointed is the level of contrast to the relevant Appendix 2 Example 6 method. The firm’s method (since June 2012) varies in its results from PS 10/12 proper redress by selectively making unjustifiable “assumptions” and then varies substantially (and cleverly) in how redress is unfairly handled within calculations.

Around June 2012, a particularly imaginative revision was added to the firms VO20_ series of redress calculations, making subsequent versions up to this time, to now be well outside of PS 10/12 requirements. From this point the firm’s calculated redress is in many cases thousands of pound sterling below what either Example 6 calculates to, or as would be calculated using industry regulated correct standards, or using FOS licenced (Exasoft) Redress Manager, or a properly reconstructed account.

Where I am looking for your help, is to correct a misassumption. That miscomprehension is: that if a firm (MBNA in particular) reports to FOS that they have made (or will, as directed, make) an “FOS guidance compliant” redress calculation – then that this is, in error, assumed by FOS to be what they will do. This has not been the case with MBNA for over eighteen months - and tens of thousands of people have been affected. It appears that this firm may not have had their calculations properly checked since a time when a not altogether dissimilar situation was ordered recalculated in 2010.

It could also be said that there is a public risk that this assessment may fall in-between the remits of FOS and FCA, and potentially not be attended to by either. I would like your help to submit our evidence with a view to seeing if this can be avoided or corrected. If it would help, as a start, perhaps an initial five or ten examples, or more, of redress calculations made by the firm under this method could be forwarded to the appropriate individual that I am requesting takes a look at this complaint.

If you can point me to the right person to talk or correspond to, that would be very much appreciated. Our further communications can spell out the basic mechanics elements of why MBNAs redress calculations are not as per regulatory requirement – to give a checkable indication that our claim is not an empty one.

I hope to hear from you soon with your suggestions, and most appropriate contact point.

Best Regards

Yours sincerely,


Signature."

Anyone, who feels that they may have been affected by this issue or, is concerned by the manner in which MBNA Limited has been or is calculating their PPI Redress may use this template letter if, applicable?
Many, many consumers have already sent the above letters. But we need many more to be popped into post boxes, in order for the FCA to take notice!
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  #6  
Old 06-02-2014, 03:03 PM
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I think a lot of people have decided now that the dust has settled on their original claims the fight is over.

i will be sending the letters to the relevant authorities. One thingI thank goodness for, I never had PPI, so it was the orginal agreements that were wrong.

Last edited by Dragonlady : 07-02-2014 at 10:17 AM.
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  #7  
Old 06-02-2014, 03:50 PM
BOUDICCA BOUDICCA is offline
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Brilliant DL, you're a STAR!!!

We do have further documents to back up our allegations but to be revealed at a later stage.

Last edited by BOUDICCA : 06-02-2014 at 03:55 PM.
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  #8  
Old 08-02-2014, 02:14 PM
BOUDICCA BOUDICCA is offline
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Quote:
Originally Posted by Dragonlady View Post
I think a lot of people have decided now that the dust has settled on their original claims the fight is over.
Ah, but the point is that their original PPI claims may well have been settled.
But the $64,000 question is:
Was the settlement figure correct and how was the settlement figure calculated?

There are many, many consumers who have discovered that the monies refunded by MBNA in relation to their mis-sold PPI was/is incorrect and insufficient.
Those very same disgruntled consumers have had to log their complaints with the FOS!

As you know, tghe show ain't over 'til the fat lady sings!

Please, get those letters in the post to the FCA and FOS.
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  #9  
Old 12-02-2014, 05:03 PM
BOUDICCA BOUDICCA is offline
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The FOS are acknowledging the letters, as they come in; a step in the right direction.
Nothing as yet, from the FCA. But early days for such a slow moving regulatory machine.

Keep it up Guys and keep mailing those letters!

Have you had your reply yet, DL?
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  #10  
Old 13-02-2014, 07:17 AM
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I am waiting for acknowledgment of my letter from the FCA
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