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Explosive documents show they even write the rejection letters!

VICTIMS of Britain ’s big - gest mis -selling scandal are having their compensation claims rejected — by computers.

Money Mail can reveal that the Financial Ombudsman Service is relying on computer software to decide whether banks should pay redress to people who were flogged payment protection insurance (PPI) alongside their credit cards or loans.

We have seen documents in which senior figures at the Ombudsman, which settles disputes between banks and customers, state that PPI case documents are fed into a computer programme which generates a ‘suggested outcome’.

They admit that although staff can make decisions on whether to force banks to pay redress, they almost always use the verdict spewed out by the computer.

In the documents, a manager admits his staff are so reliant on this technology that even the phrases in the letters sent to inform PPI victims of the decision are being generated by the computer.

It is the latest controversy to hit the Ombudsman after an undercover probe last month revealed that overwhelmed staff were throwing out PPI complaints to clear an enormous backlog.

It comes as record numbers of bank and credit card customers rush to claim compensation ahead of the A ugust 2019 deadline for PPI claims.

Figures published last week showed 1.55 million people asked their bank for redress in the last six months of 2017 — equal to one every four seconds. That was a 40 pc rise on the same period in 2016 and the highest total for four years. YeT

the number of people winning PPI mis -selling cases after taking their complaint to the Ombudsman — which steps in after customers have been fobbed off by banks — has plunged from seven in ten in 2015 to just three in ten this year.

Marc Gander, of the Consumer Action Group, which has campaigned for years for victims of the PPI scandal, says that using computers to make decisions is a ‘breach of trust’.

‘People who appeal to the Ombudsman believe their case is being considered by a human,’ he says. ‘But this suggests that the Ombudsman is applying little judg - ment before throwing out cases.

‘People who have been refused compensation should write to the Ombudsman and ask whether the decision was made by a computer and if so demand it is reconsidered by a human.’

The workings of decision-making at the Ombudsman were laid bare at an employment tribunal case in F ebruary. The ruling has been seen by Money Mail.

The documents show a former staff member tried to claim compensation for constructive dismissal after he was moved from investigating complex cases of investment mis-selling to PPI rulings. He argued that working on PPI cases was lower status as it demanded less intellectual judgment because workers relied on a computer programme called Navigator to make decisions.

Richard Whinder, a manager at the Ombudsman, says in the rul - ing that an adjudicator would obtain documents from a complainant and the bank or credit card company.

He adds: ‘The adjudicator would enter it (the documents) into Navigator, which gives a suggested outcome. I have not seen a case yet where the adjudicator disagreed with the outcome.’

Mr Whinder told the tribunal that he could only ‘assume’ that Navigator was ‘ an accurate system’. He added that Navigator produces ‘suggested paragraphs’ for the letters sent to customers with the outcome of the case.

The judge ruled that it was ‘self evident that the level of intellectual input from adjudicators using Navigator will be lower than in cases where they are required to make an assessment and draft adjudication letters from scratch’. PPI was widely sold alongside credit cards, loans and store cards in the Nineties and 2000s.

The insurance was supposed to pay out if someone fell ill or lost their job and was unable to make repayments. But many customers were ineligible to claim because they were self - employed or suffered from an existing illness.

Banks have so far paid out £30 billion for mis -selling and are desperate to turn off the compensation tap. Customers who believe they were mis -sold must initially contact their bank or credit card company with their complaint.

But at some banks, as many as eight in ten claims are rejected. THe

next step is to approach the Ombuds - man. The service gets around 3,000 PPI com - plaints a week and is understood to be struggling to cope.

In an undercover probe by Channel F our Dispatches in March, employees admitted making decisions without investigating properly. They said they were under pressure to hit targets and threatened with los - ing pay-rises and promotions.

Some said they leaned towards rejecting complaints as this was quicker than challenging banks.

The Ombudsman has since launched an investigation into the allegations. In documents submitted to the T reasury Select Committee, which is also examining the findings, experts queried some of the rulings.

In some cases, the Ombudsman has ruled that a bank did not treat a customer fairly when it soldthem PPI, but has allowed the firm to avoid paying compensation.

This happens when the Ombudsman decides the customer would have taken the cover anyway.

In one case, an MBNA customer had his claim rejected for PPI sold alongside a credit card in the Nineties, despite the Ombudsman ruling that the credit card provider did not give him ‘ sufficient information about the costs, benefits, exclusions and limitations affecting the cover in a clear, fair and not misleading way’.

A spokesman for the Ombuds - man says: ‘Firms have learned from our feedback and decisions, which means more people now get the right answer and fair compensation directly from a business.

‘Where that doesn ’t happen, we look at the facts of each individual case before giving an answer — and the sophisticated support tools we’ve developed help us do that consistently and fairly.’

It adds that Navigator was used by the more junior adjudicators and not in cases where the customer went on to challenge the Ombudsman’s decision.