Bank Claims News
Bank Claims News
In the past two years newspapers and TV stations have been dominated by stories about the banking industry: falling interest rates, rising inflation and fat cat bonuses, but for many people a far more important banking story has been unfolding which began back in 2006.
The mis-selling of Payment Protection Insurance was first reported by Bank Claims News following the launch of a super complaint by The Citizens Advice Bureau. The super complaint highlighted the large number of exemptions within Payment Protection Insurance policies, the high cost of the cover and the pressure sales techniques used by many lenders. Dubbing the industry 'The Country's Biggest Protection Racket' The Citizens Advice Bureau urged financial regulatory bodies to look into the PPI industry.
Shortly after the submission of the complaint Bank Claims News reported The Office of Fair Trading and The Financial Services Authority would both be launching thorough investigations into the Payment Protection market. As a consequence of these investigations and subsequent reports, many lenders were fined for significant failures. It was found that many policies were being sold by staff without the correct training to customers who were often unsuitable and, in addition, many lenders were failing to provide PPI customers with sufficient information and documentation.
Bank Claims News highlighted several significant ways in which policies were frequently mis-sold. Below is a list of common mis-selling examples.
- Policies were sold to customers with pre-existing medical conditions. Most Payment Protection Insurance policies do not cover pre-existing medical conditions, yet many people were sold policies without being advised of this. Bank Claims News reported instances were policyholders only discovered their pre-existing medical condition was not covered when they were sick, and unable to work, and tried to claim financial help from the policy.
- Policies were sold to customers who were in full time education, unemployed or retired. Payment Protection Insurance is meant to step in when a policyholder cannot work due to sickness, injury or redundancy if the policyholder was not employed when the policy was sold to them clearly it was of little or no use. Bank Claims News reported many such cases where policyholders were left playing for a policy they did not want and could not use.
- Policies were sold without the terms and conditions being fully explained. Without explaining the terms and conditions fully it cannot be said that a policyholder has made an informed purchase. Many Payment Protection Insurance policies have a high number of exemptions and do not cover common ailments such as stress depression or back pain. Bank Claims News highlighted many cases where policyholders had been left in financial hardship after suffering a common ailment and being refused financial help from their PPI policy.
- Policies were sold without the full costs being explained. It was discovered that many lenders were selling PPI cover without explaining the full cost implications. Bank Claims News reported a case, highlighted by the Citizens Advice Bureau, in which a customer was sold a PPI policy that was worth 50% of the original loan. On a £20,000 personal loan this would mean an extra £10,000 debt for the customer even before interest was added. As many PPI policies only cover the minimum debt repayment, for a maximum of one year, the policyholder was always going to be at a financial disadvantage.
- Customers were told they had to have the PPI Cover. Bank Claims News was shocked to uncover many cases where customers had been told they had to purchase Payment Protection Insurance. PPI is an optional extra and was never compulsory.
- Customers were told they could only have the loan / credit card, or would have an increased chance of being given the loan or credit card, if they took out Payment Protection Insurance. Bank Claims News revealed many instances where customers were incorrectly led to believe that purchasing Payment Protection Insurance would improve their chances of being approved for a loan, mortgage or credit card. Taking out PPI would have no baring whatsoever on whether a customer was approved for a loan or credit card.
- Customers were pressured into taking out Payment Protection Insurance by sales staff. Bank Claims News has revealed many cases where customers report feeling pressured into taking out Payment Protection Insurance by sales staff. Many state they were intimidated or felt they had no alternative but to take out the cover. Many people have subsequently complained about the high-pressure sales techniques used by some sales representatives.
In addition to the above list, Bank Claims News has also reported many other ways in which Payment Protection Insurance was mis-sold. If you believe you were mis-sold a policy it is your right to make a complaint. To find out how to make a claim follow the links on our site.