Mike Begg, founder of Dundee based ACC member company, Beat the Banks, has forced RBS to admit a mistake in its policy of compensating divorced women correctly in regards to their legal share of pay-outs for mis-sold Payment Protection Insurance.

As reported in The Daily Mail, Mr Begg’s campaign victory will see thousands of divorced women receive compensation, and has led to a change on policy by RBS.

The story states:

“Thousands of divorced women deprived of PPI pay-outs by NatWest and Royal Bank of Scotland will receive compensation, Money Mail can reveal. State-backed RBS-NatWest failed to pay separated and divorced women their legal share of pay-outs for mis-sold payment protection insurance (PPI). In an email, the bank, which is 73 per cent owned by the taxpayer, admits it was in the wrong and has changed its policy.

All banks sold PPI alongside credit cards and loans in case borrowers struggled to repay, but few needed it or could claim on the policies. Banks have set aside £25 billion to pay compensation for mis-sold PPI — of which RBS-NatWest’s share is £4.7 billion.

However, it has emerged that where a couple had a joint loan and then split, RBS-NatWest gave compensation to just one partner, typically the first named on the policy, often the husband. The bank will issue pay-outs to those affected. Many will be single parents and working mothers who may be due thousands of pounds.

Other major banks are thought to have complied with banking rules and divided PPI pay-outs equally between separated partners.

Mike Begg, a PPI claims expert, says: ‘There are lots of women out there whose ex-partner has raked in a fortune over PPI mis-selling while they received nothing. ‘When you think of the rate that people split up and the fact PPI sales date back to 1995, we are talking of hundreds of thousands of cases where people have been denied knowledge of pay-outs or just did not get the money because their ex snaffled it.’

Single parent Nicky Adamson, 38, took out four loans with NatWest totalling £24,000 with her then partner. She shared the repayments over seven years until they parted in 2005. Nicky cleared the final £2,800 debt herself.

In 2012, she hired a solicitor to lodge a mis-selling claim against NatWest, but got only £202 in compensation. To make matters worse, the lawyer demanded a fee of £1,700. Later, Nicky found her ex had been given £5,800 back.

The police officer, from Carnoustie in Angus, says: ‘The loan accounts were always in joint names. I had all my money with NatWest since I was a child. ‘I phoned the bank and they said they couldn’t talk about it due to data protection.’

Mr Begg says he met senior RBS managers in Manchester in April to raise the alarm about divorcees being left without compensation. An email sent by RBS to Mr Begg, seen by Money Mail, says: ‘A decision has been made to act on legal advice and change our policy to proactively calculate the proportion of refund and issue offers individually for each party to the joint loan.

‘Timescales for the implementation have not been advised.’

Mr Begg, a former banker who last year helped expose how Clydesdale Bank had avoided pay-outs after destroying customers’ PPI papers, says he also alerted the City regulator, the Financial Conduct Authority.

The discovery of the errors comes just weeks after Money Mail revealed banks were trying to claw back PPI compensation pay-outs mistakenly issued years ago.

Banks that review PPI and find payments were made in error are able to demand it back — even if the customer has already spent the cash.

RBS-NatWest says many people would have given half of the PPI payout to their estranged partner. But those who did not receive their share can call RBS-NatWest on 0800 015 0319 and ask for 50 pc of the money.

The bank has assured Money Mail it will not chase the other partner for this back.

An RBS-NatWest spokesman says: ‘Our policy now allows for both parties to apply for compensation.’

Nicky has been paid the £2,900 she is due. A spokesman for the Financial Conduct Authority declined to comment.”

Simon Evans, Chief Executive of the Alliance of Claims Companies said:

“I commend the tireless campaigning work by Mike Begg, who is one of our executive committee members. In exposing the practices of lenders that lead to consumer detriment.

The ACC will continue to campaign against such practices by lenders that lead to consumer detriment and challenge them to change their policies immediately. We will also highlight these issues where we see they exist and liaise with regulators to ensure that they are rectified or removed to allow consumers to receive the correct levels of compensation that they are entitled to.”