PPI stands for Payment Protection Insurance. It’s a clause that’s being slipped into many loans and credit agreements. It’s been around for a couple of decades now and has been a tremendous success for the providers. PPI is, in essence, insurance that states if you cannot make payments, the insurance policy will cover the debt. This includes injury, illness, unemployment or any other happenstance that prevents the policyholder from making monthly payments.
It’s not surprising most of us see that as comforting. We’re given an option for security during a transaction that we probably need anyway. We’re buying a car or getting a mortgage. We’re being told that in dire financial times, we won’t lose it so we sign on the dotted line.
Some of us don’t get to choose. A lot of consumers find PPI included in the agreement. We accept the contract, we accept the terms of the PPI.
Many consumers don’t realise they have PPI. This is illegal as transparency in loan and credit agreements is required by law. Credit cards should record PPI payments in your monthly statements. It’s a bit more difficult to uncover this information in a loan. One has to contact the lender directly and inquire.
PPI adds a substantial fee to any loan, credit card, mortgage or car financing, often tipping the planned budget.
There has been a trend regarding PPI. We’ve seen enough complaints that these policies are being tightly scrutinised for the purposes of consumer safety and fairness. It was eventually revealed that many of these claims weren’t handled with professional responsibility.
Mis Sold PPI
- The coverage wasn’t sufficiently reviewed with the policyholder
- Policies were hidden within the agreement without consumer knowledge
- Policies were costly
- Polices were sold to consumers that already had PPI
- The coverage was compulsory in order to complete the transaction
- The customer couldn’t use the PPI, even if they wanted to
These cases ultimately became referred to as ‘mis-selling’ or ‘mis-sold’ PPI.
There’s a series of criteria that can be applied to mis-sold PPI. They involve information that should have been shared before entering into the agreement or treatment after the fact.
PPI Claims Criteria
- If you weren’t employed at the time you were given PPI, or were self-employed or retired, it’s impossible to make a valid insurance claim
- If you had a preexisting medical problem when PPI was instated. If said issue prevents you from working, the provider should have warned you your claim was likely to be denied
- If the loan was paid up front with funds borrowed at the same rate, the PPI provider should give you a refund after cancelling the PPI
- If any refund that you received is less than what you’ve paid
- If any aspect of the cost of PPI was not shared with you or simply bundled into the loan quote
- If you were told PPI was obligatory
- If the terms of PPI weren’t clearly explained, i.e., what’s covered and not, etc.
- If you were over the age limit for such policies
- If no asked if you already had PPI, forcing you to have two policies
- If the term of PPI is shorter than the term of the loan itself
- If you discover you have PPI and wasn’t aware it was included in your agreement
- If the PPI was sold by a firm that’s already being investigated
If your PPI falls under any of these categories, you could be entitled to a refund. The Financial Ombudsman Service is an independent agency that officially settles disputes between businesses providing financial services and consumers. They are a direct link to registering complaints about PPI and its providers.
Diy PPI Claims
On the FOS site there is a list of financial institutions. If they are involved in your PPI and the circumstances fall under any unfair standards and practices listed above, you may have a claim. The FOS advises that you try and resolve the issue directly with the business before contacting them. If this effort fails or you need any advisement, contact the FOS directly by phone (0300 123 9 123 or 800-023-4567). Leave a message and someone will contact you promptly.
Patience will be required. The financial institution has no less than two months to look into the case. If the business can justify why it’s taking longer, the extra time is given.
Once the company’s complaint process is included, if the issue has not been resolved satisfactorily, the FOS can be asked to investigate on your behalf. You’ll have to fill out their complaint form and a PPI consumer questionnaire. Both can be found on the site. Be sure to include relevant details and actions taken. Feel free to contact them if you need assistance.
PPI Claims News
Banks rejecting legitimate PPI Complaints
The recent increase in PPI complaints being recieved by the FOS is a direct results of Banks rejecting increasing numbers of legitimate PPI complaints being sent to them. The FOS has upheld 8 out of 10 PPI complaints forwarded to them.
This 80% of upheld complaints by the FOS highlights how the Banks are increasingly rejecting valid PPI complaints being made by customers.
PPI Complaints still rising for the Financial Ombudsman
A record 86% of all complaints made to the Financial Ombudsman service is about PPI mis-selling. In the first half of the year a reported 266,228 PPI complaints for mis-selling have been lodged.
PPI complaints show no sign of slowing down. We have recently reported that Barclays was recieving an estimated 1,500 PPI complaints per day, The FOS was recieving upwards of 2,000 PPI complaints per day in July
This backs up the theory that only around 1 in 10 people have actually made a PPI claim based on their mis-sold policy. With figures like these, we can expect to see PPI complaints rising for a while longer.
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 :
The Financial Ombudsman Service (FOS) has been buried by more than 600,000 complaints about PPI since 2000. Nearly half of those complaints have been filed since July1, 2012. Between that July date and the end of December in 2012, 283,251 complaints have been filed with the ombudsman. That was an increase of 110 percent over the previous six months.
Monthly PPI Claims Payouts for July 2013 is £ 528 m
The Financial Conduct Authority (FCA) released its latest totals on monthly PPI Claim Payouts. July 2013 totals for PPI repayments was £528 million which brings the total of PPI Claims repayments made sine January 2011 to £11.5 billion.
The figures are collected from 26 firms and financial institutions that made up for 96% of all the Payment Protection Insurance complaints from last year.
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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