Tag Archives: PPI

PPI claims – hundreds every day

Posted on by

Recent figures in the media have shown that around 1,500 new claims for mis-sold Payment Protection Insurance (PPI) are sent to the Financial Ombudsman Service every day.  It is said that complaints now total 400,000 since the scandal first broke in 2008.  The ombudsman becomes involved when a dispute between a financial institution and one of its customers cannot be resolved between them, as in the case of many people who claim PPI compensation.  To vindicate those who brought the scandal to light, the ombudsman service has found in favour of 70% of cases where people reclaim PPI.

The main reason for PPI is so that people could keep up repayments on a loan, mortgage or other financial product, such as a credit card or store card, if they were to fall ill or lose their job.  While this is in theory a good product, it was often sold to people who would not have been able to claim, such as the unemployed or retired, or sold to people who didn’t realise that it was not mandatory to purchase PPI, or that the cover was available elsewhere.

In total, the big High Street banks have put aside £9bn to compensate customers who were mis-sold PPI.  And there is no way of knowing when the claims will stop.  Obviously, when the scandal broke in 2008, banks and other lenders realised that they were in the wrong and had been caught out for mis-selling PPI, but it is unclear how many more borrowers are still entitled to claim.

People are quite rightly making enquiries or complaints to the ombudsman if they feel they have been mis-sold PPI.  But this is having an adverse effect on the ombudsman’s office.  It is a public service to represent the citizens of the UK, but its workload is growing daily, and there have also been complaints about both its performance and its ability to deal with the amount of new claims it is asked to deal with every day.

Claims Management Companies (CMCs) have also seen their workload increase, as more and more publicity about mis-sold PPI appears in the media, and an increasing number of borrowers who believe that they were mis-sold PPI are turning to them for advice in claiming back money which has been falsely taken from them.  Banks, building societies and other financial institutions have all criticised CMCs for their aggressive marketing, but the people who mis-sold PPI in the first place are only trying to protect themselves from more expensive litigation.  All cases will have different levels of complexity.  Anyone who believes they have been mis-sold PPI should think carefully about their options.  It is naturally easier to try to solve the dispute with a bank or other lender, but this is sometimes not possible.  The man in the street may not have the time or inclination for this, and it is worth enquiring with a reputable CMC about the best options.

Are you entitled to pursue a complaint for PPI mis-selling on behalf of your deceased?

Posted on by

Banks charge customers Payment Protection Insurance (PPI) in case of default on bank products, such as mortgages, loans and credit cards.  Usually, this is in case a person is made redundant from employment and cannot maintain the repayments.  The insurance then covers the repayment amounts.

Depending on the bank, Payment Protection Insurance (PPI) terms and conditions may vary.  Criteria are set for PPI compensation payout eligibility in the event of PPI claims.  Media reports have highlighted cases of mis-sold PPI and those customers affected have been encouraged to reclaim insurance payments they have made.

The coverage given to PPI and the banks’ selling practices has led to a surge of claims for PPI mis-selling.

The Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) have handled rising PPI mis-selling complaints.  How the payment protection insurance was sold to a customer, the customer’s status and needs at the time, and the terms and conditions of the insurance policy are all taken into consideration in conclusion of the case.

A common question that arises is whether or not someone who was mis-sold PPI, and subsequently died, may have their PPI compensation claimed by someone else.  Benefits paid out by the insurance policy may hinge on a range of factors or eligibility criteria.  A claim may only be successful if the criteria of the PPI policy are met.  PPI policies may be in a person’s sole name, or joint names, and could limit policy benefit payouts.

Some people were sold PPI cover and were in fact, by their status, ineligible for PPI payouts.  Claims for PPI mis-selling have increased.  Self-employed people are not made redundant and service pensions often include payments in the event of redundancy, and therefore do not require PPI cover.

Family or relatives of a deceased person may have assessed PPI as part of the concluding of financial affairs relating to the death of the loved one.  This may have brought to light PPI mis-selling and the need to make enquiries about the eligibility for reclaim.  A person may make a PPI claim on behalf of the deceased as long as the necessary PPI policy documentation, and a death certificate, is provided.  PPI claims are assessed on a case-by-case basis.

The avenue to claim PPI mis-selling is open to all, however, not all may be successful in their claim.  Making sure that all of the PPI records can be produced as part of the claim is very important, as without these documents it may not be possible to prove the case.

Should an evaluation of a bank’s assessment for PPI show that a deceased person was not actually eligible for PPI cover, mis-selling may have occurred.  Proving this after a six year period may be a challenge as banks may dispose of documents after six years, particularly if the circumstances of the sale of PPI are lost.

Information about the deceased’s financial records may be accessed through Freedom of Information Act, however access may be given under specific criteria only, and records may not contain adequate information  for a reclaim of PPI.

Are banks stalling paybacks of mis-sold PPI?

Posted on by

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?

Posted on by

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.

Why are so many people entitled to claim PPI compensation?

Posted on by

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.

What do we need to do to reclaim PPI?

Posted on by

Although it is welcomed that banks and building societies have held their hands up to mis-selling Payment Protection Insurance (PPI), there are still anomalies in recent requirements from the Financial Services Authority (FSA) that mean that borrowers who are still owed money may not realise this.  The lenders have been told to contact by letter customers who they think may have been mis-sold PPI.  Even so, those who are not informed can still claim, because it is only those who have been mis-sold PPI because of the lender’s systematic failing who will be notified.

There are many borrowers who believe they have been mis-sold PPI who will feel that this is the end of the line.  But this is not always the case.  The Financial Ombudsman Service exists to mediate between customers and lenders who cannot resolve their issues.  But if the ombudsman rejects your complaint you will not be able to receive compensation, and your bank has won.  In this case, professional help is the best option.

Many people will be unaware if they were mis-sold PPI, because of the way the salesman; either face to face or on the telephone, has followed the script.  It was often the case that PPI was mis-sold simply by leading borrowers to believe that it was mandatory.  By checking their statements, which should be itemized, customers can easily check whether they have taken out PPI.  If it is the case where they were unaware that it was not a necessary part of the loan agreement, but merely an add-on, then they have grounds to reclaim PPI.  If they think that they were mis-sold PPI, even if they had agreed to take it out, but their circumstances at the time that they took out the loan meant that they would not be entitled to any payout under the cover, then they have a good reason to claim for PPI compensation.

There are many websites from where people can download a template letter designed to help them reclaim PPI, but as all cases differ in their levels of complexity, this may not be the best case.  Although it may be the answer to your problems when people first look at it, it is not considering their unique position.  As time has gone on and lenders have been told by the FSA to review a huge number of cases, customers could still have a chance of a successful claim for PPI compensation if they find that they are entitled to claim again.

Claims Management Companies exist to help borrowers through the process.  It will be daunting to almost everyone who is not involved in the financial industry.  With a guarantee of no fees if people’s claim for PPI compensation fails, they have little to lose but a couple of hours of their time by seeking professional and experienced advice.

What is mis-sold PPI?

Posted on by

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.

Should it be easier to claim for mis-sold PPI?

Posted on by

Thousands of people in the UK have successfully claimed against mis-sold Payment Protection Insurance (PPI) since test cases in 2008 led to changes in regulations.  But while people are able to download template letters to send to their lenders when claiming PPI compensation, the government has done little to help customers with the process.

Anyone who has had to go cap in hand to a bank for a loan will naturally only be thinking if his or her request has been accepted.  They can then be led down the path of taking out PPI that may be either unnecessary or next to useless.  It only came to light after many years of mis-selling that banks and other lenders were getting their customers to pay for products that were not fit for purpose.  Lenders’ salespeople are experienced in making as much commission as they can from every customer, so it is natural for them to use techniques that will earn themselves more on each deal.

As there are thousands of cases which have already been settled successfully, it would seem that the government could have done more to help people who have genuine grievances, but do not possess the knowledge or experience of PPI mis-selling to help them pursue their claim.  Most people have enough to do in their lives, apart from learning the language of financial documents and financial litigation.

Just as one would take their car to the local garage to be serviced by professionals, so anyone with a reason to believe that they have been mis-sold PPI should look to seek the services of a Claims Management Company.  These are professional people who take their job seriously, who are experienced in the area and will act in the best interests of their clients.  They will, of course, expect a fee if they take on your claim and it is successful, but it is not reasonable to expect anyone to work for nothing.  At the same time, if they take on your claim and it is not successful, you have nothing to pay, so nothing to lose.  Recent rulings from the financial authorities have forced the banks to write to customers whom they believe to have been mis-sold PPI.  Not only that, but those claimants whose claims were rejected in the past can now claim again, and many of these have been successful in their claims about mis-sold PPI.

So while the government’s Financial Ombudsman’s Service is overwhelmed with 2,500 cases every day which could not be resolved between the borrower and the lender, it is not advertising any practical help for the thousands of people who want to reclaim PPI.  The most sensible option for people who think they have been mis-sold PPI is to seek professional advice.  Until the government makes moves to help the thousands of genuine complainants who feel they have been victims of PPI mis-selling, the best option is to consult experienced professionals whose daily job is PPI compensation.

New rules surrounding PPI selling

Posted on by

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.

Mortgages and PPI

Posted on by

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.