September 1 • 2019 The Mail on Sunday^99S
O, IT is finally RIP
PPI. If you failed to
register your
complaint for the
mis-selling of this
loan insurance by
the stroke of midnight last
Thursday, then it’s all over.
That is unless you have
exceptional circumstances or
are applying to one of the
banks – Santander for one –
whose websites failed at the
last moment and have now
extended their deadline.
Despite the avalanche of
advance warnings, including
ubiquitous ads featuring a
model robot head of Arnie
Schwarzenegger as The
Terminator, millions left it to
the last moment to sign up.
Free online service Resolver
reported more than 270,000
registrations on the last day
while some banks’ systems
crumpled under the weight of
applicants.
Huge numbers of these
applications will have been
people simply
taking a punt –
even if they
know full well
they never took
out these
controversial
insurance
policies. But a
good number
will have been
genuine and
they will be
glad they made
this last-minute
effort, with average potential
payouts of £3,000.
The industry may well be
breathing a collective sigh of
relief that PPI will soon be a
thing of the past. But they
cannot relax for long. There are
plenty of new concerns that will
keep complaints departments of
consumer businesses busy for
years to come.
Top of the list is likely to be
the issue of ‘loyalty charges’.
These are where customers
who stick with the same
provider stoically year in and
year out and are rewarded –
not with discounts as you might
expect – but with higher
premiums than new customers.
The Mail on Sunday has
campaigned against this
pernicious practice for years
and called on the industry to
put loyal customers first.
Martyn James, of online
complaints service Resolver,
says the Financial Ombudsman
Service is already upholding
certain complaints where
policyholders with insurance
companies have been
overcharged for staying loyalto their provider – a signal that
momentum may be on the
victims’ side at last. And he
predicts this is just the tip of
the iceberg. The Competition
and Markets Authority
recently found that broadband,
mobile, savings and other
sectors are all playing the
same trick on customers who
remain faithful.
What would happen if victims
of this widespread scourge all
demanded their money back?
PPI – to date the industry’s
most expensive mis-selling
scandal and costing about
£ 5 0 billion – could soon pale
into insignificance.MANY of us will have returned
from our summer foreign
travels (sad face) with excess
currency that we will simply
stick away and forget.
Research by exchange firm We
Swap estimates these coins and
notes add up to as much as
£ 9 00 million. As an experiment
I checked my own
sock drawer last
week and unearthed
a cache of notes
from years gone by,
including Mexican
pesos, US dollars,
euros – and most
surprisingly Irish
pounds. Ireland –
part of the eurozone- hasn’t used these
notes since 2002 so I
really have let them
fester. The good
news is if I head to the Irish
central bank I will be able to
exchange them to euros. If I
convert my 30 Irish pounds on
my next visit to the Republic
they’ll give me €38 (£34.50). My
two Mexican 20 peso notes are
worth a mere £1.63. My $32 are
worth about £31 and my bagful
of 30 euro coins £27. A grand
total of around £94.
But I didn’t stop at my top
drawer. A separate report last
week – by a sofa cleaning
company no less – revealed the
nation found £4 million down
the back of their settees last
year (as well as the odd pair of
dentures and even a dead frog).
I found no such treasures in
mine but did stumble across a
shoe box under the bed –
containing two crisp tenners.
Hurrah. Only these were the
old-style paper ones that went
out of circulation in March last
year. The good news is that I
can exchange them at the Bank
of England ... Now all I need to
do is put this forgotten £114
treasure to good use.
Goodbye PPI,
now it’s time
to cash in on
cost of loyalty
Mis-selling has
cost the banks
£50 billion – this
could be the tip
of the iceberg
[email protected]rather than all of them. On top of
this, a new system to flag ‘suspi-
cious’ purchases is being developed
for use by banks, The Mail on Sun-
day understands.
Technology being launched by
Mastercard will enable banks to
analyse incredibly precise details of
your purchase.
For example, banks will be sent
information on your location and
the device you are using to shop
online. If you are using a mobile
phone, this could include the angle
that you are holding the phone and
the way you tap the keys on the
touch screen, industry sources
say. This information will be
transmitted to the bank in the
background.
If anything seems amiss – for
example, the way the phone is being
held does not match your usual hab-
its – this will be taken into account
when the bank decides whether to
trigger a request for the customer
to prove their identity.
The same is true for larger and
unusual purchases – such as flights
or a big order from a foreign web-
site you have never used before.
The Strong Customer Authenti-
cation rules will also be applied to
some off-line shopping on the
high street.
For example, people making con-
tactless payments – where they tap
a card on the payment terminal
rather than inserting it – may be
asked to enter their PIN more often
than is the case now.by Sally
Hamilton
Deputy persoNAL FINANCe eDI torPersonal Finance
Have you been a victim of online shopping fraudsters? Tell
us your story by emailing [email protected]WHEN WILL I HAVE TO
START USING CODES?
ORIGINALLY, the changes were
due to happen overnight on Septem-
ber 14 – as dictated by the EU. How-
ever, many online companies were
not ready to implement the neces-
sary changes this month. There
were also concerns that customers
had no idea what was going on due to
a lack of communication by banks.
Some banks were also criticised for
failing to prepare a way to cater for
customers who do not have a mobile
phone, lose their handset or suffer
from such a poor mobile phone sig-
nal that the codes could not be
received promptly enough to com-
plete online transactions.
To allay these concerns, the Finan-
cial Conduct Authority earlier this
month pushed back by 18 months
the final deadline for banks and
retailers to play by the new rules.HAVEN’T I SEEN
THIS BEFORE?
YES – but in a much more basic form.
Years ago, card companies intro-
duced a second layer of checks for
online purchases. Mastercard, for
instance, has a service called Secure
Code and Visa has Verified by Visa
for banks that use their cards. Cus-
tomers were asked to create a pass-word they had to enter to complete
some transactions. However, in prac-
tice Mastercard says just 1 per cent
of purchases trigger a request for
this extra level of verification.
And because the systems were
never obligatory, many retailers
such as Amazon chose not to use
them for fear the extra hassle would
put off customers. Thanks to the EU
ruling, there will be no avoiding the
new authentication services. Mas-
tercard’s system is called Identity
Check and will replace Secure Code.HOW DO I AVOID
GETTING CAUGHT OUT?
TO PREPARE for changes, you
should first ensure your bank has
your up-to-date phone number. It’s
also worth downloading your bank’s
app to your mobile phone and work-
ing out how to use it.
If you are offered a card reader- which banks such as NatWest and
Nationwide Building Society
require for logging on to online
accounts and authenticating pay-
ments – get one as soon as you can.
Eric Leenders, of banking trade
body UK Finance, says: ‘We would
encourage anyone concerned about
their ability to verify online pay-
ments to speak with their bank or
provider, to discuss what alterna-
tives may be available. Your bank
could use a text message, phone
call, banking app or card reader to
check your identity. Other methods
are available and more are being
developed that will make it easier,
including biometric technologies.’
SHAKE-UP: Shoppers face a new system of authentication codes which can use your phone to verify online paymentsNaTioNal NEWSPaPER PERSoNal FiNaNCE SECTioN oF THE YEaR
Will banks soon
check it’s you
shopping simply
by the way you
hold your phone?