Tag Archives: Ppi claims

Are banks stalling paybacks of mis-sold PPI?

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Payment Protection Insurance (PPI) is charged by banks in case a customer defaults on loans, mortgages or credit cards such as in cases of redundancy.  Thousands of cases have arisen where customers have been mis-sold PPI and have initiated cases to reclaim monies lost.  Current events indicate that banks may be stalling in PPI compensation payouts.

Complaints about banks to Financial Ombudsman Service (FOS) rise

Complaints to FOS about the improper handling of mis-sold PPI claims have nearly doubled to 85,562 during the first six months of 2012, an increase of approximately 75 per cent when compared to 49,419 in the final six months of 2011, but similar to the first half of 2011.

During 2011, regulators gave banks more time to assess claims for PPI compensation.  With banks having more time to assess claims, some commentators are suggesting that they may have stalled the claim process.  The fact that FOS has decided about 72 per cent of PPI complaints in the customer’s favour indicates that banks may have stalled the payback process too.

The complaints were about banks’ use of technical claim forms, turning away valid complaints, poor claims handling and stalling payments.  The most complaints were about Barclays followed by Lloyds TSB, MBNA, Lloyds TSB Black Horse, Capital One and HSBC.

Changes in banks’ PPI responsibilities

The authorities have reviewed the conduct of parties involved on behalf of consumers trying to reclaim PPI.  The result is that banks have been given a deadline by which to process PPI claims and improve their complaints handling.  The fact that the FSA have given such a deadline may also indicate that banks have taken longer than they should have in processing PPI claims.

Banks have raised alerts about fraudulent claims for PPI mis-selling.  Out of approximately 3,000 PPI complaint calls to FOS daily, half are investigated by the Ombudsman.  Some cases have been in the favour of banks.  Yorkshire Building Society, for example, has won 93 per cent of cases.

Investigating claims and fraudulent activity takes time.  This factor may contribute to a delay in banks processing mis-sold PPI.  The appeals by banks to avoid the large payments of compensation to so many consumers also delays payouts.

Self-claim versus use of claim management companies

Claim management companies use intensive marketing to encourage people to reclaim PPI that may have been mis-sold to them.  These companies act as an agent or middle-man and take a large proportion of the PPI compensation claims and may potentially slow down the PPI claims process.

Since last year, consumers have received more information through the media about PPI, how to identify PPI mis-selling, and steps to take in order to claim.  The spike in complaints and self-representation may be due to consumers having more knowledge about PPI and the claims process, who are therefore coming forward to make their own cases.

A simpler claims process with easier forms to complete may add to consumers being able to handle claims themselves.  Self-representation for claiming PPI, or complaining about how claims are processed, saves consumers the fees charged by the claims management companies.

Who is to blame for the influx of mis-sold PPI claims?

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Although the vast majority of claims against the mis-selling of Payment Protection Insurance (PPI) are genuine, and the majority of those have been successful, Antonio Horta-Osario, the chief executive of Lloyds bank, has claimed that one in four of the claims for PPI mis-selling are from claimants who never had a PPI policy.

The PPI scandal came to light in 2008, when it emerged that salespeople from financial institutions such as banks, building societies and credit card companies were selling policies to people who either didn’t need them or would not be able to claim if they fell ill or became unemployed.  But thanks to consumer groups taking test cases to the courts, thousands of people in the UK have successfully claimed a share of the estimated £9 billion that UK lenders together have set aside to settle these claims.

As the publicity has grown about this mis-selling and the possibility for borrowers to reclaim PPI, so the number of companies offering to help people with PPI compensation has grown.  But at the same time, so has the number of false claimants.

While there may be a few claimants who know they are merely trying it on, who have never had a PPI policy, the Claims Standard Council believes that banks collectively are trying to put the blame onto these unfair complainants, while ignoring those with genuine complaints of PPI mis-selling.  They argue that, quite rightly, customers still have a mistrust of banks that have mis-sold them PPI in the past.  If there are customers who have been victims of mis-selling PPI, they are entitled to have their claims heard fairly, and these claims should not be influenced by those who see the banks’ allocation of £9bn as easy money to be had through their false claims.

But clearly, the blame for the influx of mis-sold PPI claims must be placed firmly at the feet of the banks and building societies.  In the first place, their salespeople were not trained to treat their customers with the respect they deserved.  Rather, they were motivated solely by commission payments.  Just as any other salesman will try to convince customers about add-ons for a new car, for instance, so the financial and credit salespeople were keen to earn a commission for PPI.

Thankfully for everyone, the practice of mis-sold PPI has been exposed, and the people responsible should know, with so much ongoing publicity, that they cannot get away with it anymore.  Meanwhile, the PPI compensation train trundles on, with around 2,500 new complaints every day to the Financial Ombudsman Service.  It is to be hoped that all the spurious complainants, who are making claims for PPIs that never existed, should not be allowed to stand in the way, or slow down the process, for those with genuine claims against their lenders if they believe that they have a real claim for PPI compensation.

What is mis-sold PPI?

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Payment Protection Insurance (PPI) is a financial product designed to safeguard anyone taking out a loan or other credit agreement against falling ill or losing their income.  Borrowers could be assured that the insurance would cover their payments on the loan or mortgage if this happened.  While this was a good and sensible product for most people to purchase along with their loan, the scandal that broke in 2008 showed that many people had been paying unnecessarily for the product.

Those who were unemployed, self-employed or retired were not covered under the small print of PPIs, and became eligible to claim PPI compensation.  As a result of pressure selling, or simply not informing customers of their options, the sale of these PPIs was deemed to be mis selling, and that is why thousands of people In the UK have been able to successfully reclaim PPI.  For instance, many of these customers were led to believe that taking out PPI was part of the process of taking out the loan or credit agreement, making customers think that they had no choice in the matter.  What they should have said, to save their employers having to put aside around £9bn, is that the PPI was not mandatory, and if customers did want to pay for the insurance, it was available elsewhere.  As the salespeople were obviously on commission, the selling of PPI was part of their job, although not in the borrower’s best interests, especially as they may not have been eligible to claim on it anyway.

The simple fact is that, although many people would have wanted and also benefited from taking out this insurance cover, many people were mis-sold PPI.  In this case, and due to the massive publicity, thousands of people are claiming against the mis-selling of PPI.  The Financial Ombudsman Service, which mediates on behalf of the public when a dispute between a financial organisation and a borrower cannot be resolved, is receiving around 2,500 complaints or enquiries every day.  This has naturally put pressure on the ombudsman’s office, as many people believe that they were mis-sold PPI and feel they can handle the process on their own.  But it is often more complicated than aggrieved borrowers may think, so specialist help is often necessary.

There are organisations that provide a template letter to send to their lender for borrowers who feel they have been mis-sold PPI, but as every case varies, these may not be sufficient to help every borrower who feels that they have a case.  A reputable claims management company can help to guide anyone who feels they have been mis-sold PPI in the past.

Hopefully, all banks, building societies and other lenders will have learnt from the whole PPI mis-selling scandal and treat their customers with the respect they deserve.  Otherwise, they will just have to keep paying out more money in 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.

Mortgages and PPI

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While most publicity about Payment Protection Insurance (PPI) has concerned loans and credit card agreements, there has been an enormous payout for those who were mis-sold PPI with their mortgages.  It is estimated that banks and building societies will pay back around £60 million to customers who are entitled to claim PPI compensation in this area of the mis-selling scandal.

It is estimated that around two million mortgages have had PPI taken out on them.  While some of these may have been taken out legitimately, with the borrowers being fully aware of their options, many people who were mis-sold these policies have successfully been able to reclaim PPI.

Following a series of discussions between the Financial Services Authority and lenders, new measures were announced which were intended to protect borrowers’ rights.  Lenders will now be obliged to give a refund on any premium increases for borrowers whose policies were recently altered.  Borrowers must be fully informed of any increases in premiums and have these increases refunded if they have not been told.  The FSA also said that any company that had sold PPI would have to review almost 200,000 claims that they had received and rejected.  The FSA’s managing director, Jon Pain, said: “The FSA welcomes this positive move by MPPI firms to reverse recent changes in premiums or cover which will put affected customers back in the position they were in before the policy was changed.  It will also give all MPPI customers clarity about when and why firms will be able to vary these in future.”

The chairman of the Financial Services Consumer Panel, Adam Philips, added: “It cannot be right that firms change the terms and conditions of an insurance policy just as times get hard and when people are more likely to try to claim on it.

“We note that this agreement is to freeze premiums and cover for existing customers until at least January 2010. We will be watching to see how the FSA ensures MPPI customers continue to get a fair deal beyond this date. Significant changes to cover go against the whole principle of why people pay for insurance and undermine consumers’ trust in the industry.”

As has been seen in other areas of borrowing, pressure selling has been used, along with other mis-selling methods, to lead mortgage borrowers to believe that taking out PPI was either an obligatory part of the deal, or could only be obtained from the lender.  These are two of the main areas where lenders have had to give PPI compensation to borrowers who have been mis-sold PPI.

The PPI compensation could be much more on a mortgage than on other forms of loan, because of the longer term of a mortgage.  Anyone who thinks they may have been mis-sold PPI on their mortgage should think seriously about looking into ways to reclaim PPI.  Most people are trusting and therefore have little experience of financial matters, especially when it comes to the small print, and this is where expert guidance from a specialist Claims Management Company is invaluable.  Using their experience could be the difference between reclaiming thousands that the borrower is owed and nothing at all.

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.

How do I know whether I’ve been mis sold PPI?

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If anyone became unwell, redundant or unemployed during the term of a loan, mortgage, or other credit agreement, it would have been a sensible idea to take out a Payment Protection Insurance (PPI).  However, these have been shown to have been systematically mis sold to thousands of UK customers.

There are a number of reasons for this, and the most startling of these is that the policies were mis sold to people who could not have claimed on them when they were unable to meet their payments.  The policies were sold to the self-employed, unemployed or even retired people who would not have been eligible for payment protection cover.  This has been shown to be mainly because of pressure selling by salespeople working for financial institutions who were more interested in their own commission earnings than the interests of borrowers.  By selling, or mis selling PPI, these policies to borrowers, they were feathering their own nests with no regard to the future.  In the end, this has cost their employers, the banks, building societies and other lenders, around £9bn between them.

Other customers may literally have not known that they were buying a financial product, the Payment Protection Insurance, when they had no need for it, or decided they would take a risk and save money by not paying for it.  The salespeople would not even talk them into taking out the mis sold PPI, but lead them to assume that it was a necessary part of the loan or credit agreement.  If a salesperson advises borrowers about insurance or any other add-on charges, there always grounds for suspicion.  Of course, it is easy to advise people after the case, but there is a lesson to be learned for everyone about the whole mis-selling scandal.  It has been described by the Financial Services Authority as ‘systematic mis selling’, and it is clear that all lenders were in collusion about this.  The thousands of people who have successfully claimed PPI compensation were sold a product that they didn’t want, didn’t need or didn’t even know they were paying for.

Even since people were made aware of the lenders’ mis-selling of PPI in 2008, many borrowers do not realise that they are entitled to PPI compensation.  This includes those who have had their original claims rejected by their lenders, as new rulings by the FSA and other bodies have forced banks and building societies to inform their customers if they think they may be eligible for PPI compensation.

It is clear that the huge majority of people who have taken out a loan in the last decade or two have been mis sold PPI, either because they were ineligible to claim on the policy, or took it out without realising the implications.  Anyone who has taken out any kind of loan should seek professional advice to see whether they are owed their own share of that £9bn which the banks took from their customers.

Help With PPI Jargon

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The whole financial world is confusing to most people, who think it is occupied by people who speak a language which is full of abbreviations, acronyms and terms that those who do not work in the industry cannot understand. There have been cases of people being put off Payment Protection Insurance (PPI) claims simply because they think that the financial world is closed to outsiders. But anyone who thinks they have genuine PPI claims should not be deterred.

The Financial Ombudsman Service (FOS) is one organisation that operates specifically to help borrowers who feel they may have been mis-sold PPI. It is part of the government and therefore concerned with helping citizens, rather than representing banks, building societies, loan companies or other financial institutions. The FOS is meant primarily to act as a mediator in disputes between financial institutions and its customers, which in the case of PPI compensation are lenders and borrowers.

Some people are confused by the terms ‘premium’ or ‘single-premium policy’. Premium is just a term for the amount that you pay for insurance cover, whether it is car insurance, home or buildings contents insurance or for payment protection. A single premium policy is when the premium that borrowers pay on PPI is added to the loan from the start, meaning they pay extra interest on it. However, these have now been banned, but many people were miss-sold them in the past and are in the process of claiming PPI compensation.

At the centre of the scandal about PPI was the question about whether these policies were
mis-sold, although even people who have been through the process of reclaiming PPI still don’t understand what the term means. If something is deemed to have been mis-sold, it means that either the person who it was sold to was unaware of its implications or necessity, or it was not fit for purpose; meaning the wrong product had been sold to the wrong person. This could be payment protection insurance sold to someone who, for instance, was unemployed, self-employed or retired at the time that they took out the policy.

Payment Protection Insurance itself has also been misunderstood. It is a good idea for those in full-time employment who want to protect themselves and have their loan repaid in the event of them losing their income. But many of these PPI policies were sold wrongly to people who didn’t want or need them, or were unaware that they were able to choose not to buy them. These are the people who are now reclaiming PPI payments, which they had no need to pay in the first place.

The jargon is used by institutions such as those in the financial industry, which want to blind those outside with science and strengthen their positions. Talking to a reputable company if people feel they have a genuine claim against being mis-sold will clear a way through the jargon and could get back all the money that they wasted.

Do I Need To Use A Claims Management Company?

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While most of us think that we are well-informed when it comes to our own finances, some aspects of it can be quite specialised, especially when concerning PPI compensation. For all sorts of reasons, it can be difficult for someone without specialist knowledge in this area to reclaim PPI that they may have been mis-sold.

A Claims Management Company (CMC) is a specialised firm that deals with claims such as mis-sold PPI. Being full-time professionals in this business, they have the skills, knowledge and experience that most people do not have. Just as nobody would ask their gardener to cut their hair, so they go to a professional hairdresser. Similarly, if anyone has reason to believe, as thousands of others have found, that they are owed PPI compensation, then it is the only sensible action to use the services of a CMC. These professionals would have been through the process hundreds of times and will be able to maximise their clients’ PPI compensation if they think that they can reclaim PPI.

As with any other companies involved in the financial world, such as bankers, insurance salesmen and even estate agents, some CMCs have come in for criticism since the PPI scandal received widespread publicity. Some have come under fire for aggressive marketing, for instance, on daytime television, cold calling and email campaigns. However, there are many other reputable CMCs who are in the business of looking after their clients’ best interests. As with many other professions, everyone seems to get tarred with the same brush, and a few bad apples can give a whole sector of the industry a bad name.

CMCs also manage other areas of compensation, such as personal injury claims, and again they may have been criticised in the past for what is deemed to be their aggressive marketing tactics in these areas. But many people, such as those entitled to PPI compensation or compensation for an injury following an accident for which they were not responsible, do not realise that they could make a claim. Some unscrupulous insurers will do anything to avoid paying out on a claim, and will try to fob off members of the public but, with the weight of a reputable CMC behind them, many people have made a successful claim, and got the money they were entitled to.

Word of mouth is the best recommendation, so anyone who thinks they have a legitimate reason to reclaim PPI should ask friends, relatives or work colleagues if they have any good or bad experiences with Claims Management Companies. This is a sensible option to begin with, because any company can make claims about their services that are impossible to prove. Before choosing a CMC, any claimant must be sure that they will be acting throughout the process in your best interests, and not their own.

Fraudulent ppi claims hurting industry

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There has been much written on this subject but it seems there are an increasing number of unscrupulous claims management companies out there that are taking advantage of consumers and slowing down ppi claims processes with the lenders.

Essentially, by sending in spurious blanket claims to lenders like Lloyds TSB, where in actuality only a small percentage are actually valid, they are slowing down the process for everyone.

Many of the industry watchdogs and the main lenders are becoming increasingly aware and rightfully annoyed with these actions. Indeed the actions of the companies that engage in these activities are giving CMC’s (Claims Management Companies) a bad name.

However, there are good companies out there that do a great job and who process the ppi claims properly, essentially earning the commission share from the client. We pride ourself on our processes and feel very strongly that our procedures and systems allow us to deal with client ppi claims efficiently and competently.

Our process involves obtaining the loan documents from the lender, at our cost, so that we may properly ascertain, firstly the presence of ppi and then the validity of the claim. Following that we will recontact the client to perform a detailed question & answer session to obtain further details. Only then will we proceed to write a detailed ppi claims letter, highly personalised to the individual case and certainly not a standard template letter.

This process is lengthy but we believe in earning our payment from our clients.

In addition, by obtaining all the loan documents from the lender we are able to decide and advise on whether the settlement from the lender is good enough, or whether it’s well under what should be paid. In this scenario we would advise a rejection and would fight for whats due by liaising with the lender on the matter. It is only by following these detailed processes that one can make an informed decision. Anything less for your ppi claim would be considered poor value for money in our opinion.