Paymentshield customers receive £500,000 refund over PPI breaches
Paymentshield failed to send Payment Protection Insurance (PPI) annual reminders setting out how much customers paid for their policy, the type of cover they have and informs them of their right to cancel.
In late 2016, Paymentshield told the Competition and Markets Authority (CMA) that it had failed to send these reminders to over 3,000 customers. The CMA sent Paymentshield a public letter in 2017 outlining the company’s plans for issuing refunds and for ensuring the problem wasn’t repeated.
However, the CMA has now identified two further breaches.
On one occasion, Paymentshield failed to send 604 customers annual reminders in relation to their mortgage PPI and income protection PPI due to an IT error. A second failure meant 22 customers only received statements every two years as opposed to annually. The failures took place between April 2013 and August 2019.
Paymentshield will need to take immediate action to bring in systems that check annual reminders are accurate and have been sent. It will also need to put in place an independent auditor to review processes and to produce a plan setting out key dates for the actions.
Customers are given the choice to continue with their policy or cancelling it and receive a refund from the date of the first missed annual reminder.
For the most recent failings, the company has already repaid more than £380,000 to its customers with a further £170,000 of repayments expected.
Adam Land, senior director of remedies, business and financial analysis at the CMA, said: “It is unacceptable that Paymentshield has again broken our order by failing to send customers vital information about their PPI policies.
“The legally binding directions we’ve issued today will make sure this doesn’t happen again, and we expect the company to repay those affected quickly.
“These breaches are serious and, if we had the extra powers we’ve proposed to the government, could have resulted in fines.”
YourMoney.com has approached Paymentshield for comment.