Tag Archives: missold

Why are so many people entitled to claim PPI compensation?

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Payment Protection Insurance (PPI), regardless of the recent bad publicity, is actually a very good idea in principle and may be an ideal product for many borrowers who need it.  People who take out a loan or any other type of credit agreement may become ill or lose their jobs during the term of the loan, and these people would then be covered by PPI.  But many other borrowers may have been mis-sold PPI because they were not informed at the time that they took out their loan that it was not mandatory, or even that they may not have been eligible for protection.

The person who sold them the loan was on commission, therefore they would have wanted to sell them as much of their products as they could at the time they took out the loan agreement. By telling them that “of course, we’ll add in the PPI,” or something similar, they may have been led to believe that this was mandatory.  However, since the PPI mis-selling scandal was exposed in 2008, and the Competition Commission’s new rulings came into force this year, thousands of people have realised that they were mis-sold PPI cover.

There are some major ways in which PPI was mis-sold in the last ten years.  The most common method of mis-selling was by salespeople neglecting, or wilfully avoiding telling customers that PPI would be added to their monthly payments.  Anyone who was sold a single-premium policy would have suffered even more, because they would not only be paying for the cover in the first place, but paying interest on it as well.  No wonder so many people were outraged when the scale of this misspelling was disclosed.

It has now appeared that PPI compensation is due not only to people who were mis-sold the cover on a loan or mortgage, but also on other financial products, such as hire purchase, credit cards, store cards or even for nursing home fees.

One of the most galling aspects of the business is when people who took out PPI and knew exactly what it was find in the end that the policy does not cover them when they need to claim on it, and are not entitled to a payout.  It is most satisfying of all for these people when they find that they can reclaim PPI.  Remember, it is not just the cost of the payments on the policy that can be reclaimed, but the interest that could have been earned with that money.

Many of us are confused or baffled by financial arrangements, and it is precisely this that the salespeople who are responsible used to their advantage when they mis-sold PPI.  Now that so many people realise that they are entitled to PPI compensation it is to be hoped that this kind of mis-selling has finally been stopped.

Top ten institutions accused of mis-selling PPI plans

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And the winner is … Barclays.  Or the biggest loser, depending on how one looks at it.  One of the High Street’s longest-established financial institutions was also the one that most people complained about in the second half of 2011.  Around 12,000 complaints were brought against the bank by its own customers, with a massive 99% of these being successful.  This is the same percentage of successful cases brought against Lloyds and MBNA Europe Bank.

While an average of 72% of all complaints were upheld by the Financial Ombudsman Service across Britain’s banks and other lenders, complainants were successful in 84% of those cases brought against Barclays.  The company has admitted that PPI claims were responsible for a 67% rise in complaints against it.

Lloyds had been a clear leader in the first six months of 2011, with the most complaints about its services, but was pushed into third place by Barclays, with MBNA in second.  Across the industry, complaints against banks continued to rise.  Complaints regarding mortgages rose by 38% to 5,202, complaints about insurance increased by 22% to 14,000 while cases involving credit cards were up by 9%, reaching almost 29,000.

After consumer pressure, it emerged that banks had been systematically mis-selling PPI to customers, either face to face or over the telephone, for a number of years, and it was viewed within the industry as standard practice.  The lenders were either deliberately not informing their customers correctly about whether taking out PPI was mandatory, whether it could be purchased elsewhere, or selling it to customers who would not be able to claim on the policy.

When it comes to complaints about mis-sold PPI, there are a couple of disparities.  The majority of High Street lenders were unsuccessful in, on average, more than 95% of cases, but Nationwide and Capital One were found to be liable for PPI compensation in only 7% and 11% of cases respectively, despite receiving around the same number of complaints against them.

It emerged that more than £2 billion was paid by all the banks combined in 2011 over PPI mis-selling.  The headline figures have made so much publicity that it has encouraged more and more people to try to find out whether they can reclaim PPI, with banks setting aside an estimated £7.5 billion to cover the expected compensation.

The top ten banks, in order of PPI complaints against them, were:

  • Barclays, with 6,975 complaints, of which 99% were upheld
  • MBNA Europe Bank, 5,377 complaints, 99% upheld
  • Capital One (Europe) 5,057 complaints, 11% upheld
  • Black Horse, 4,999 complaints, 98% upheld
  • Lloyds TSB, 4,257 complaints, 99% upheld
  • HSBC, 2,813 complaints, 87% upheld
  • Bank of Scotland, 1,954 complaints, 98% upheld
  • Nationwide, 1,778 complaints, 7% upheld
  • Clydesdale Bank, 1,336 complaints, 57% upheld
  • HFC Bank, 1,078 complaints, 93% upheld

It is clear from the figures that all lenders have been found to have mis-sold PPI.  It makes sense for anyone who has ever had any kind of loan to see if they are owed PPI compensation.

Top five PPI myths revealed

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Despite the thousands of successful Payment Protection Insurance (PPI) claims since 2008, and the massive publicity that these have generated, there are still many myths circulating about the whole process of PPI mis-selling and its results.

One of the top five myths that people have about mis-sold PPI is that it is not worth the hassle and stress of going through the process.  But this is almost always not the case, as the thousands of successful claimants will tell you.  With no obligation, a company like http://www.reclaimyourmoney.com can tell borrowers whether they have a claim, whether it is worth pursuing, and how much compensation they can expect to receive.  So the stress and hassle exists only in people’s minds.  One wouldn’t expect to service one’s car, put a new roof on their house or perform any other professional service, so claimants should leave all the bother to PPI experts who can advise them professionally.

Many people are concerned that they have not kept the relevant paperwork.  After all, bank or other financial statements are thought to be of no use and, if they have not been stuffed in a drawer, they have been shredded and disposed of.  But your bank or other lender is obliged to provide you with any information relating to personal loans or mortgages.  Many successful PPI claims have resulted in success for the borrower without the need for old statements.

There are many unsubstantiated rumours about the financial information that is kept about people by companies, and these have multiplied since the beginning of the PPI mis-selling scandal.  Why, or indeed how, could anyone have collated all this information from the many lenders in the UK?  Unscrupulous cold callers will try to tell people that their name is on a database, that they have information about them, and that they are guaranteed a payout.  Reputable companies never cold call.

Thanks to the clever scripts of PPI sales people, many borrowers who took out the insurance are under the impression that, as they agreed to the PPI policy they cannot claim, as they were aware of it at the time.  However, most of them will have been unaware at the time of signing that the policy was not obligatory.  These people will be able to claim PPI compensation.

Another rumour in circulation is that going through the process to reclaim PPI will affect the claimant’s credit rating.  This is, of course, untrue.  A person’s credit rating has nothing to do with anybody else, and there is no shadowy organisation monitoring everything that one does. A person’s credit rating is only to do with your borrowings, not with claims against mis-selling.

A reputable company that specialises in PPI compensation will be able to clear up these top five myths, and any others that may have circulated.  They will also be able to advise borrowers of their best course of action and how much money they may have thrown away in the past through being mis-sold PPI.

New rules surrounding PPI selling

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At the beginning of the new tax year, April 6 2011, new rules came into force governing the selling of Payment Protection Insurance (PPI).  The headline ruling is a ban on ‘point-of-sale’ selling, meaning that PPI cannot be sold at the same time as a loan or credit agreement is made.

The new ruling from the Competition Commission means that the type of insurance which covers sickness, unemployment or accident can only be sold seven days after the agreement for a credit card, personal loan or mortgage.  There must also be a seven-day period between the issuing of a PPI quote and its sale.  Customers will then be given a separate quotation.  This should put an end to the mis-selling of PPI which resulted in thousands of PPI claims.  These ‘cooling-off’ periods are commonplace in credit agreements, but until now have not included PPI.

Now, anyone wishing to buy mortgage protection insurance will be made to wait at least 24 hours before purchase of the cover, and the company will have to wait seven days before even issuing a quote.  Unsurprisingly, some providers were failing to tell their customers about certain aspects of the cover, resulting in many of them having to reclaim PPI, and this part of the ruling is a response to this.

These rules will come as a welcome relief to anyone using credit in the UK, but too late for anyone who has been mis-sold PPI.  Borrowers now taking out new credit agreements but who choose to take out PPI will be sent an annual review, detailing the cost and reminding borrowers of their right to cancel.  Although, after action from the Financial Services Authority, most lenders have ceased selling single premium policies, these will now be banned anyway.  Single premium policies were a way of selling PPI where the whole-term cost of the insurance cover was added at the beginning of the loan, which meant that the borrower was paying interest on their insurance along with their loan interest.

There will be an obligation to include information about PPI in all literature, and make clear the message that PPI is not mandatory and that, if wished, it can be obtained from other sources than the lender.  The financial institution will also be obliged to provide every borrower a separate PPI quotation that gives full details of the cover.

Since the scandal broke in 2008, customers have understandably been reluctant to take out PPI cover, especially those who believe they are entitled to PPI compensation from mis-selling in the past.  The new ruling should go a long way to reassuring customers that nothing is being hidden from them.  However, there will always be unscrupulous lenders, or those looking for a way round the rules, so the new ruling does not mean that borrowers should take their eyes off the ball.  It is essential for buyers of any financial product to know their rights, be armed with the right questions and know the right answers.

How to qualify for PPI compensation

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Anyone who has taken out any kind of personal loan in the past ten years could be eligible to claim for mis-sold payment protection insurance (PPI).  This could be a personal loan, car finance, credit card or store card.  If they were sold PPI at the time that they took out the loan and it wasn’t explained fully to them, or it wasn’t needed, then they qualify to claim back the payments they have made. In a few cases, people would be happy to take out PPI, but the majority of borrowers, as has been seen in the news recently, were sold a financial product that was not fit for purpose.

For instance, PPI usually only covers borrowers for up to two years, so they may have been paying unnecessarily if the term of the loan was for a longer period. In this case, they definitely qualify for PPI compensation and they are owed money.  Similarly, if they had a diagnosed illness or medical condition at the time that they took out the agreement, which may have prevented them from continuing to work, then the PPI was mis-sold to them.

The most astounding way in which PPI was mis-sold was to the unemployed, self-employed or retired.  These people would be exempt in any case from claiming on their insurance policy, so are entitled to reclaim PPI.  Even if they took out the policy in good faith, thinking it was a worthwhile investment, the terms may not have been explained to them properly.  This applies especially to exclusion clauses in the policy, which cover back or stress related problems, for example.  If the policy was sold over the telephone, there is more opportunity for the salesperson to avoid telling borrowers everything that, legally, they should have.

PPI claims have been successfully made if the salesperson did not inform the policyholder that taking out PPI elsewhere may have been cheaper.  They should also have made it clear that it wasn’t a part of the deal that they took out PPI with themselves, or anybody else.  The salesperson may have had a sales script, which made them think that PPI was part of the contract.  If they did, and it wasn’t fully explained that it was not, then they can reclaim PPI.

Sales patter can be quite hypnotic and seductive, and sales people know how to work their scripts.  These salespeople were obviously working on commission, and were paid more on every contract if they could get the borrower to take out PPI.  If it was not explained clearly at the time that PPI was not necessarily a part of the contract, then they were mis-sold the insurance.

If any of the above applies to borrowers, then they are probably entitled to PPI compensation.  They can then join the thousands of people in the UK who have got back the money they thought they had thrown away by agreeing to mis-sold PPI.

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 PPI claims 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.