The PPI scandal.
If you’re like most people, you’ve grown used to hearing about the PPI scandal.
Oddly though, there is still a load of misinformation surrounding the whole subject, and I’ll be discussing the subject across many levels.
In my blogs I’ll be debunking many myths, misunderstandings and hang-ups that people may have. I’ll be showing the ‘bottom line’ on various aspects of the PPI claims arena. And I’ll be underlining truths in this sector that continue to be largely misunderstood.
But today I’m going to assume you’re reading this because you’re interesting in a claim – either in making one, checking information about one, investigating whether you have an additional one, wondering if the money has all been claimed already, that kind of thing.
If any of the above applies to you, then I guess the most important step at this stage is – how do I find the right CMC (Claims Management Company) to manage my claim successfully to a refund or compensation?
Seriously – there are still PPI claims to be made?!
It may seem unlikely that anyone who has been mis-sold a PPI policy has not made a claim already – that’s what you’re thinking, right? Well think again – the reality is startlingly different!
According to the PFCA, the Professional Financial Claims Association – ONLY AROUND 50% – HALF – of the sums paid out represent ACTUAL REFUNDED PAYMENTS, as of late 2016.
The rest is interest, with the banks obliged to pay 8% interest on the money being returned. This suggests an even higher bill for PPI.
To go to the ombudsman you have to first complain to the bank, so it’s likely banks are still wrongly rejecting claims from over half of those who have been mis-sold.
When did the mis-selling of PPI begin?
In short, ages ago!
PPI has been sold alongside mortgages, credit cards and other unsecured loans since the 1990s.
It was supposed to cover payments on loans if customers fell ill or lost their jobs. In 2005 the CAB, or Citizens Advise Bureau, issued a ‘super-complaint’ to competition watchdogs about what it described as a ‘protection racket’, eventually leading to compensation payments to consumers, and sales of some types of PPI being banned altogether.
How many people did PPI affect?
The original Financial Services Authority, the FSA – now defunct and replaced by the Financial Conduct Authority, the FCA – told parliament that 53m PPI policies had been sold.
Around 45m of those were sold by banks, worth around £44bn.
Even now, it’s not clear how many of these policies were mis-sold. Initial estimates by the FCA were that 3m people were affected – but by January 2016 12m people had received compensation, totalling £24.2bn!
Clearly, any notion that PPI has all been reclaimed, or that the scandal has run its course, would be a mistaken one. There is a mountain of unclaimed compensation money still waiting, unclaimed!
Okay, so I want to take action but need to find the right CMC.
OK, first of all; the banking industry and their supporters continually believe that you do not need to use a CMC at all. This is correct.
HOWEVER, and this is important…
I will also say that there are some underlying reasons WHY they say this continually, and it is important that you understand them to decide for yourself if they are NOT in your interests!
Again, I will expand in future blogs but for example here are some core reasons showing the reality of ‘going direct’;
- Banks have underpaid compensation for mis-sold payment protection insurance policies to the tune of around £1billion (reported from 2014 onwards by BBC among others).
- The shortfalls reportedly affected credit card customers with Lloyds, Barclays, MBNA and Capital One. So several banks. And it doesn’t mean other banks wouldn’t be affected either.
- The earlier statistics for Reject Claims – the Ombudsman is upholding 70% of rejected complaints. Incorrectly rejected BY THE BANKS.
- So the old lines about ‘you don’t need skills and you don’t need time’ look very weak when stacked up against the evidence.
Clearly, a professional CMC can manage these hurdles and many more, often obtaining a result which, even after a fee is deducted, makes much more sense.
So here’s 10 TOP TIPS to help you find a great CMC and get a great RESULT
1) Upfront Fee – Never EVER pay one! Do NOT give any payment details upfront. If asked, walk away. End of. At Maple we NEVER charge upfront fees.
2) Offset. Offset is when a refund goes into an existing loan or credit card balance instead of to you. Yes, this lowers the balance owed. Yes, it means that you owe less over the term of the loan or credit card. So you have benefitted. But you do not receive anything ‘in your hand’, so to speak.
Will you still be expected to pay a fee to the CMC? (If the credit card or loan is now closed, then this will not be an issue). Check our website for our details in regards to this.
3) ANY/EVERY text message stating that you are owed a specific amount of money for your PPI refund is a lie. No CMC or Marketing Company has access to your bank records to provide this information to you. They do not even know if you have PPI.
And it is illegal for companies to contact you in this way. Again, if asked, walk away. End of.
4) ANY cold call – NEVER EVER disclose bank account or personal details. Best to do research, choose the best company, and call them yourself.
5) All CMC’s must be regulated by the Claims Management Regulator. You can check that the company is currently registered as a regulated business here https://www.claimsregulation.gov.uk/search.aspx
6) The CMS’s Terms and Conditions for the service you are looking at must be displayed on their website. See for example our website.
7) Bankrupt – if you are Bankrupt or even if you have been discharged, as things currently stand you will not receive your refund. It will be sent to the Official Receiver or your Trustee. There is no benefit to you to process a claim if you have been Bankrupt.
8) IVA – If you are currently in an IVA, the refund will be sent to your IP.
9) Completed IVA – if you’ve completed an IVA and you decide to use a CMC you will need to use a specialist Claims Management Company who is experienced in PPI and completed IVA.
10) Services. If the CMC has a strong range of services and specialism detailed on the website, indications are that they will know their stuff. So choose wisely, take control and get the ball rolling!