The Royal Bank of Scotland has been accused of training its staff to mislead customers to prevent them from cancelling their Payment Protection Insurance (PPI) policies. The allegations come from a whistleblower within the bank’s ‘customer loyalty team’, who recently detailed claims of the abuse to the Financial Services Authority.
The whistleblower claims that staff members stall calls by putting the caller on hold for 5 minutes before passing them on to the person next to them in hope that the caller will hang up. This is done purely as an attempt to thwart cancellation of the policies. The customer is reportedly later offered a ‘goodwill gesture’ to convince them not to cancel their policy. It has also been claimed that customers’ are told that they cannot cancel the PPI without also cancelling the credit card and paying off their debt in full.
As a ‘goodwill offer’, advisers are instructed to persuade clients to accept a two-month ‘free trial’ of the insurance policy to placate them; however the free trial was in effect only for one month as the policy had until recently a 30-day cancellation period.
The source, who does not wish to be named, said that they raised a moral objection with senior members of staff, but requests to have the procedure revised were apparently ignored. He said: ‘I believe the whole process is dishonest and unethical and I refused to take part in it.’
The Royal Bank of Scotland’s Payment Protection Insurance (PPI) fee on a £10,000 personal loan over 4 years is £2,768. This is in addition to the interest and loan repayments and at an interest rate of around 10.4% could mean the customer eventually paid back a whooping £14,932. With RBS having one of the highest rates of PPI on the market it would be perfectly understandable for a customer to want to shop around to find a cheaper alternative. Selling PPI at the same time as the selling of the loans or credit cards was lambasted by the UK Competition Commission last year for this reason.
Via: The is money & Every Investor