Lloyds allocates £3.2 Billion to missold PPI Claims

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Lloyds Banking Group confirmed first half losses this year after it allocated a whopping £3.2bn to tackle the payment protection insurance scandal.

Comparing to a £1.3bn profit last year Lloyds have reported a £3.3bn pre-tax loss in the six months to June.

Putting aside the allocation of money compensating for missold PPI, the bank has seen underlying profits drop to £1.1bn (to 31%), due in part to the economic downturn across the country.

Barclays has also allocated a substantial fund of £1bn towards paying out compensation for ppi claims.

This all points in the right direction for consumers who have waited a long time for the recent judicial review to complete. We will now start to see movement across the board with lenders under strict instruction from the FSA (Financial Services Authority) to deal with their backlog of cases by 31st August 2011. Following this date we will see claims being processed on a case-by-case basis, but the overall wait time should significantly reduce.

If you think you have been missold ppi and you want to make a claim use our online ppi claim form or call us on the phone number at the top of the page. We offer a strict NO WIN NO FEE service with no hidden charges and no upfront fees. It wont cost you anything to find out if you have a ppi claim.

FSA extends time limit for PPI complaints

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The FSA (Financial Services Authority) have brought into effect a temporary ruling that says PPI claims now have more time in which to refer their cases to the FOS (Financial Ombudsman Service). This rule was already in effect but was due this month. They have simply postponed it for 6 months until 27th October 2010. However this is only for PPI complainants who have been sent a final response letter from the PPI provider between the 28th November 2009 and 28th April 2010 inclusive.

The Financial Services Authority have said that they are working on a longer term solution to ensure consumers are treated fairly when making complaints about PPI issues.

The FOS have revealed in their latest annual report that PPI claims account for over 30% of new cases, in the year ending March 2010.

They have dealt with nearly 50,000 PPI complaints compared with just over 31,000 the previous year. While a small proportion of cases related to PPI claims, most of the them involved complaints about the sale of Payment Protection Insurance.

Missold PPI is now a major industry in the UK, with many people submitting PPI claims in order to seek compensation.

If you have taken out a loan, mortgage or credit card since 2004, and you think you were sold PPI, then get in touch with us using the phone number above. Alternatively use our online PPI claim form and we will do the rest for you. It costs nothing to find out if you have a claim and we work on a NO WIN NO FEE service. What are you waiting for???

PPI cases hit record levels at Financial Ombudsman Service

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The number of complaints by consumers received at the Financial Ombudsman Service has increased to record high levels. This has been caused mainly by a 40% increase in PPI claims.

The FOS, whose main task in the Financial Service industry is to settle complaints between consumers and financial businesses, resolved 166,000 new cases to year end March 2010. This was an increase of 46% on the same time period last year. The majority of this increase was due to more and more customers complaining about being missold PPI (Payment Protection Insurance). PPI is intended to meet loan or credit card repayments should the insured become unable to do so, due to sickness, accident or redundancy.

Almost 50,000 of new missold PPI complaints were lodged. This was an increase of 58% on the previous year.

Interestingly, over 90% of PPI claim cases were upheld in favour of the customers. This is far higher than the average rate of success of 50% across other similar industries.

If you have taken out a loan, mortgage or credit card since 2004, and you think you were sold PPI, then get in touch with us using the phone number above. Alternatively use our online PPI claim form and we will do the rest for you. It costs nothing to find out if you have a claim and we work on a NO WIN NO FEE service. What are you waiting for???

Ban on sale of PPI might go ahead

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Plans to restrict the selling of Payment Protection Insurance might go ahead. within the next few months.

The Competition Commission want to ban the sale of PPI at the time loans and credit cards are sold. The main reason for this is because historically it was the main time where PPI has been missold to consumers.

The Commission has said that this proposal will give consumers more time to make up their mind, as to whether they want to purchase PPI with the lender of their new loan, or whether they even want it at all. The decision is provisional and is open to consultation. The final verdict will come around July 2010.

Barclays have said that PPI is a very useful product to the lender.

The main issue here is that more borrowers will walk away unprotected, and in these uncertain times, this probably isn’t a good thing. However, being missold PPI, obviously isn’t good either.

The mis-selling of Payment Protection Insurance has been going on for some time. Consumers generally have been unaware that this insurance was optional, or that they have the option of shopping around. Many lenders used aggressive selling techniques, mainly because the profit margins on these particular types of products were very high.

PPI claims are on the rise, and we expect them to come to a head some time in 2013. Claiming back missold PPI premiums is your right. The sale of PPI has been dubbed a “protection racket” by some Consumer Groups.

If you have been sold PPI in the past 10 years, make sure to use our ppi claim form here at reclaimyourmoney.com.

The new PPI Claims Process

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A new process has been developed by the FOS (Financial Ombudsman Service) for handling PPI claims. This effects how consumers and businesses deal with complaints about missold PPI. It has been designed to help the FOS to handle the complaints that are not resolved in-house within the given time frame.

To understand the prejudice the customer may have endured at the point-of-sale, the FOS has developed new forms for the consumer which captures all the details required for the FOS and the bank. The bank and the FSA know that PPI was a poor product which was sold in the millions, mainly for the purposes of financial gain for the lender, rather than protecting the borrower.With the levels of claims management companies increasing, the awareness of PPI will inevitably increase as more media and internet search marketing will increase.

This should see the word of mouth for PPI Claims increasing, which will perpetuate the levels of claims.  It has been anticipated that the peak will be in 2012 and should return to zero within 5 years.PPI claims will increase, so if you have not made your claim yet, please visit www.reclaimyourmoney.com/claim and make a claim.

Competition Commission restricts sale of PPI

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Consumers were declared a victory recently as PPI (Payment Protection Insurance) was banned from being sold at the same time as credit products like personal loans or credit cards.

The Competition Commission concluded, after a 2 year investigation, that lenders have the upper hand when selling PPI with loans or credit cards. This results in an unfair and uncompetitive market where you as the consumer ends up being over charged.

The Commission ordered banks and lenders that they must wait a full week before trying to sell PPI, after having sold a loan or credit offer to a borrower. Also prohibited is the Single Premium variety of PPI. This is where the total cost of the insurance is added to the debt therefore dragging the payments out over the full term and of course incurring interest charges on this money.

Peter Davis, Competition Commission, said: “The ‘point-of-sale’ advantage has meant that leading providers have faced little competition for PPI and, as a result, have charged persistently high prices. Allowing the current short comings to continue unchecked would be damaging to consumers.”

They hope that the new 7 day cooling off period will encourage the borrower to shop around for the best insurance available. The Competition Commission also ordered lenders to send personalised PPI quotes and Annual statements to customers.

PPI covers repayments on credit products, like loans or credit cards, if the borrower is unable to pay due to illness, accident or unemployment. Lobbiests say that the insurance is too expensive, and has had to many exclusions in the past. It has also been frequently mis-sold to customer who would never have been able to make a claim due to pre-existing medical conditions, or other factors which should have been discussed at the point-of-sale.

Louise Hanson of Which? said: “For too long too many consumers have suffered from shoddy, expensive and inadequate protection. It’s a great shame that since we began campaigning for better products, many people have wasted millions of pounds on PPI.”

However, a spokesman for the British Bankers Association said that loan cover was more important than ever for consumers during the economic downturn: “As two million people approach unemployment it is totally without conscience to encourage people to borrow without back up. The Competition Commission has gone well beyond its remit. This is an irresponsible decision exposing vulnerable customers to economic difficulty when they may need help most.”

The FSA, or Financial Services Authority, has already taken serious action against 19 firms over mis-sold PPI policies since September 2006. These companies include Egg, Capital One & Alliance & Leicester. This was mainly for selling the product without explaining the cost breakdown or exclusions, or selling the product aggressively.

Adding PPI to a loan over £8,000 would potential cost over £3,000, but many people, including the self-employed or those aged over 65, would be unable to claim. In one example, a couple borrowed over £50,000 and were persuaded to take out a PPI policy at a total cost of over £22,000.

Thousands of PPI policy holders have already reclaimed the costs of their insurance on the basis that they were mis-sold their policy.

“This must carry on; the Commission’s report strengthens the weight of reclaimers call – and everyone who’s ever bought one of these policies should check it to see if they’re due their cash back.”

In 2006 alone, lenders reported profits of over £1.4 billion just from selling PPI.

Cost of mis-sold PPI policies tipped to hit £203m a year ahead of reform

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The cost for insurers to compensate customers who have been missold PPI (Payment Protection Insurance) has doubled to £203,000,000 (£203 million) a year.

The FSA (Financial Services Authority) has provided the updated figure as it extended consultation on PPI reform for six more weeks.

They expect insurers to have to deal with over 400,000 complaints each year, as opposed to the 160,000 initially predicted. The larger number of expected complaints will push-up the overall cost of settling future mis-selling claims from £58m – £80m to possibly as much as £203m per year. Insurers and banks are expected to pay out between £900m & £2.8bn in compensation to existing Payment Protection Insurance holders who have deemed to have been missold their policies.

Payment Protection Insurance allows borrower to keep up debt repayments on their loans, credit cards or mortgages if they lose their income or are otherwise unable to pay due to illness or injury. The issue is that a lot of customers have been sold these expensive policies where the insurer hasn’t properly ascertained the customers needs, including pre-existing medical conditions and employment status. This has resulted in many large companies being fined for mis-selling, and therefore has paved the way for us to Reclaim Your Money. Click here to submit a claim to us and we will get in touch to discuss it.

Regular PPI now just as expensive as single PPI

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The FSA had insisted that all lenders stop selling single premium PPI by the end of May ahead of the Competition Commission ban on the product starting in 2010. However, consumer champion Which? said new research had now found some regular premium PPI with unsecured loans that cost just as much as single premium PPI. For example, taking out a £5,000 Alliance & Leicester loan with regular premium PPI now costs the same as it would have done with single premium PPI in November 2008.

However, unlike single premium PPI, regular premium policies are not added on to the value of the loan so borrowers do not pay interest on them, which should make them cheaper. Although regular premium PPI can be cancelled more easily and should make it easier to switch provider, insurers are free to increase premiums and reduce cover by giving policyholders 30 days’ notice.

Lucy Widenka, personal finance campaigner at Which?, said: “How disappointing that some lenders appear set against offering value-for-money cover. Making regular premium PPI as expensive as single premium PPI makes lenders look as determined to make a certain amount of money from people, whatever they may be selling. To avoid a bad deal, consult an independent financial adviser about your overall financial protection needs and shop around before committing to anything.”

Lenders curb sales of payment protection insurance

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Some of the biggest high-street banks in Britain have stopped selling single premium PPI, ahead of an expected curb on its sale by the Competition Commission.

Despite warnings that it could result in more expensive loans, the Commission is expected to outlaw the sale of single premium policies when it announces its final proposals to clean up PPI sales in the next couple of weeks.

Pre-empting a ban, Alliance & Leicester, Barclays, The Co-operative Bank, Lloyds Banking Group, which includes Lloyds TSB, Halifax and Bank of Scotland, and RBS/Natwest have announced that they will stop selling single premium PPI with unsecured personal loans by the end of this month.

The move was welcomed by Jon Pain, managing director of retail markets at the Financial Services Authority, the City regulator. He said: “We are pleased these firms have stopped selling single premium policies and would expect other firms to notice these developments and review their own positions. A PPI product can be helpful for customers wanting protection on a specific credit agreement as long as the policy is sold appropriately.”

PPI policies cover debt repayments if a borrower cannot work because of accident, sickness or unemployment, but they have been widely mis-sold. The Competition Commission said that sales standards are particularly low for single premium policies, where consumers pay for the insurance upfront. The cost of the PPI is usually added to the loan and interest charged on this amount, significantly increasing the cost.

The Commission recommended a ban on single premium plans in an interim report published in November, where it also suggested that lenders be prevented from contacting a customer about the insurance within 14 days of a credit agreement being signed and called for advertising to be made clearer.

Lenders have warned that the proposed crackdown would force them to push up rates on loans because they would no longer be able to subsidise deals with profits earned from the insurance. Payment protection has been one of the biggest moneyspinners for banks such as Lloyds, Barclays and Alliance & Leicester, worth an estimated £3.5 billion. A huge slice of the profit is expected to be lost if the whole package of measures are approved.

Stephen Sklaroff, director-general of the Finance and Leasing Association, which represents lenders that sell the insurance, said: “Significantly fewer policies will be sold. That will inevitably have an effect on loan rates, possibly pushing up rates by several percentage points.”

But Louise Hanson, head of campaigns at Which?, the consumer group, said that PPI sellers know that they are facing a losing battle.

She said: “These firms have recognised that the party is over for single premium PPI and the rest should follow suit. People need to protect their finances more than ever so providers should be developing products that meet consumers’ needs and offer value for money. PPI has been widely mis-sold in the past so anyone with a personal loan should check if they have a single premium policy as they could claim their money back.”

Which? is using social networking site Facebook to encourage people who think they may have been mis-sold the cover to reclaim their money. It has launched Payback, an application designed to spread awareness of PPI among recent graduates and young professionals who may have been mis-sold a policy when taking out an unsecured loan or credit card.

Peter Jackson, managing director of Lloyds Banking Group, Consumer Banking, said that its decision to stop single premium sales was in direct response to customer research.

He said: “Lloyds TSB customers told us they valued the cover PPI provides but, as the economy moved into uncertain times, now wanted a more flexible product which would make it easier for them to manage their budgets.

“Halifax and Bank of Scotland have also taken the decision to launch a monthly premium payment protection insurance policy. This has been in development over the last few months and will be launched early February 2009.”

The FSA has taken action against 20 firms over poor sales practices involving PPI, including levying its largest ever fine in the retail sector when Alliance & Leicester was ordered to pay £7 million for what the regulatory described as “serious failings” in its telephone PPI sales.

Number of mis-sold PPI claims double each month

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According to an article on the Financial Times websites, the number of cases for mis-sold PPI (Payment Protection Insurance) are dramatically on the increase, with almost all claims being upheld. It has become clear that millions of policies have been mis-sold to unsuspecting customers over the years.

Overall, PPI mis-selling complaints had doubled every month for the last six months, backing up recent statistics from the Financial Ombudsman Service (FOS) that PPI claims through the FOS have trebled in the last year. Of those complaints, the FOS upheld 89 per cent in favour of the consumer.

As a result, we are urging people who have taken out loans, mortgages and credit cards in the last six years to check whether they have payment protection insurance, because the chances are it was mis-sold. If you have make sure to contact us and we will help you claim your money back!

One of the main problems at the moment is that many people do not even know they were sold PPI. In the past it was simply added to the loan. In many cases the whole of the amount of the insurance was added to the amount of the loan so that even if the loan was paid off early, you still have to bear the total cost of the payment protection insurance and not just what you’ve used.

Check all your loans, credit cards and mortgage documents from the last six years NOW to make sure you weren’t sold something you weren’t aware of.

This has been one of the biggest financial cons in the history of the industry.

Don’t let them get away with it! Reclaim Your Money NOW!