Santander banking situation and PPI issue

What customers can expect from the latest financial blunder.

09:31 29 April 2013

Many people are familiar with the recent Payment Protection Insurance (PPI) news, and the fact that many people were inadvertently charged for insurance they didn’t qualify to receive in the first place, or didn’t request.

 

There has been much discussion regarding the issues and many have filled out forms in an effort to receive a payment of the PPI they paid without being eligible to receive benefits.

 

In a similar story, banking entity Santander has admitted that it made a mistake in 2008 when it sent out letters regarding the interest rate they could charge, customers were unaware they could have changed companies without penalties within a certain amount of time.

 

Santander has already started the process of rectifying the issue, like the PPI solution, it has decided to contact applicable customers to inform them of the situation.

 

What can Santander customers expect from this situation?

 

• A letter detailing the mistake will be sent to roughly 270,000

 

• Only specific types of mortgages would be effected during a limited number of years

 

• The company will look into individual cases if they are contacted

 

• They have reached an agreement with the Financial Conduct Authority

 

• Funds have been set aside for those who should be compensated

 

Will there be required forms similar to the PPI situation?

 

• As of yet, there has been no indication of a standardized form being created. Santander has stated that each case will be individually reviewed, so there may be forms depending upon the situation.

 

Will you know how much, if anything, you might get back?

 

• It appears the likelihood of receiving a payment for most people is low.

 

• Santander has set aside £232 million to right the issue, but the funds also are earmarked to cover two other financial mistakes.

 

• Past issues with other banks resulted in customers receiving between £500 and in some cases thousands of pounds, similar to that of the PPI payouts, and also dependent on individual circumstances.