PPI Mis-Selling by Banks
Over the course of at least the last decade, a number of banks throughout the United Kingdom and Europe at large were rightly accused of mis-selling payment protection insurance with their credit cards and traditional loan products. Consumers, in some cases, were told that accepting such insurance was ‘required’ as part of the loan, which was never a true statement.
Such behaviour ensued because bank employees and officials were given large commissions when they sold a PPI product to consumers; the behaviour, deemed unethical, as netted numerous banks in legal trouble and has gotten others fined. Today, those banks are offering refunds to customers who are mis-sold the popular and controversial insurance product as part of their lending process.
Even though these refunds are being offered by the banks, they’re hardly advertised and the banks themselves are trying to discourage customers from applying for such a refund. They’ve gone so far as to demonize the very companies that are heaping consumers apply for these refunds, and they’ve been known to arbitrarily deny a claim pertaining to a mis-sold PPI policy. So, with all of this controversy, what does one need to know to get their money back from some of the world’s largest banks?
First, Determine if a Mis-Sold Policy Actually Exists
There are many cases where, unfortunately, it’s impossible to prove that a PPI policy was mis-sold to a consumer. Yet, for every case where it’s difficult to prove the bank had nefarious intentions, there are plenty of ways to prove that a PPI product was never relevant and a consumer was never eligible. Among these disqualifications from eligibility for PPI:
– If a consumer was unemployed, self-employed, or retired at the time
– If a medical problem existed that prevented the consumer from working
– If the consumer was sold a single premium PPI policy
– If PPI was not adequately explained, or indeed not explained at all
– If the consumer’s age exceeded the age limitation of the PPI policy (between 65 and 70 years of age)
– If the consumer had already purchased an insurance product from an employer or an income protection plan
If any of the above are true, it will be quite easy to prove that the payment protection insurance sold alongside a credit card or loan product was done fraudulently or without the customer’s knowledge. This constitutes valid grounds for a refund claim based on past filings and litigation in the UK.
How to File the PPI Refund Complaint and Request
Consumers who were intentionally mis-sold PPI coverage should file a claim with the lending institution which sold the loan to them at the time of its origination. If they interacted with a representative agency, which was merely reselling a financial institution’s products, their claim should be filed with that representative agency before the claim is escalated to the bank itself (if such an escalation is required).
Banks don’t like these PPI claims, and they’ve gone to great lengths in the public eye to discourage them. However, they do understand how important it is to maintain a good public image and, for this reason, they often pay out such claims without much of a complaint once it has been properly filed. That being said, banks do reserve the right to dispute any of a consumer’s evidence proving that they were mis-sold a PPI product, and consumers should prepare for such a challenge in case it arises after the claim has been processed by the financial institution or representative agency.
If a bank disputes the validity of any reasons a consumer cites for a refund, this is not the end of the road. The consumer can challenge the bank’s response, reiterating their eligibility for a refund of their PPI payments; they should demand a quick response from the bank within 14 days of the letter’s submission via post. If this, too, fails to get the attention of the bank, then it’s time to take the case directly tot he Financial Ombudsman Service. When contacting this office, consumers will once again need to state the reasons that they believe make them eligible for a refund of any PPI policy funds paid to the financial institution where their loan or credit card product was originated.
How Much to Expect in a Refund Check from Major Banks
Generally speaking, if the financial institution or the Financial Ombudsman Service agrees that a PPI policy was mis-sold to the consumer, they’ll immediately be eligible for a full refund of any charges paid to the bank as part of that policy. Banks don’t generally impose complicated methods of policy fund repayment when granting a customer’s request, mostly due to their desire to maintain their good standing in the public eye.
It should be noted, however, that customers who cancelled their PPI policy with a major financial institution only part of the way through the repayment of a loan will likely get only a fraction of their policy costs back. This is due to legislation which requires only a so-called ‘fair’ refund when a consumer has cancelled the policy after it has been partially paid for. In this instance, consumers should follow up with the bank and ask for an explanation of a less-than-full refund of any PPI charges that were initially paid.
The Key is to be Tough, Fair, and Resourceful
Banks are only holding PPI refund amounts because they simply don’t want to part with their money and revenues. These products, though mis-sold, were lucrative for banks, and they’re not going to go out of their way to issue them back to the customers who were wronged. Even so, those customers are almost all entitled to a full refund of their policy charges over the life of a loan or other credit product, and a strongly-worded letter to the institution where that product originated is the best way to begin reclaiming those funds once and for all.
PPI Mis-Selling Complaints: News & Information
PPI Compensation payments boosting the economy
The Office of National Statistics has released figures suggestiong that the £10 billion in PPI compensation payments that have been made is boosting the economy.
This is nothing new in March we published an article where an analysis by Which? showed that UK consumers paid out £50 billion for PPI protection since 1996. The article also highlighted some other PPI statistics provided by the ONS
Payment Protection Insurance (PPI) Explained
Payment Protection Insurance (PPI) has played an interesting role in the world of finance over the past several years. This insurance product is intended to protect both the borrower and the lender in the event that the borrower becomes unable to make loan payments, but the product is often misunderstood. Furthermore, while the product is intended to provide a valuable safeguard, it was often abused and led to significant regulatory reforms as well as lawsuits with damages reaching well into the billions. Given the ongoing prevalence of this type of product, consumers will be benefited from understanding PPI, what is does and how it can be abused.
PPI Claims Service – Midlands, UK
Maple Leaf Financial have a specialist team of solicitors dedicated to dealing with the mis-selling of payment protection Insurance (PPI) products by the banks. We are happy to review these PPI products and to claim compensation for our clients where appropriate.
We will work with you to ensure that you get the correct PPI settlement or refund and any and all fair compensation that may be due to you as a result of PPI mis-selling. We will deal directly with your PPI provider, be it a bank or insurance company and neither we nor our specialist claims team will be fobbed off by them at any stage. If their offer is too low or derogatory and they won’t take us seriously we will challenge them on your behalf.
Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim
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