Mis Selling PPI
In recent weeks the saga surrounding the Payment Protection Insurance scandal has taken another turn as The British Banking Association(BBA) finally conceded defeat in its battle against The Financial Service Authority (FSA). The argument centred on a new set of guidelines announced by The FSA which aimed to prevent future mis-selling. The guidelines were originally due to come into effect in December, but were put on hold when the BBA requested a judicial review. The BBA alleged that the new guidelines were unfair to banks as they would, in effect, force them to example old cases against the new set of rules, but the courts disagreed and found in favour of The FSA.
For years many lenders have been mis selling PPI and many have been reluctant to accept failings, even in the face of overwhelming evidence. It is estimated that millions of policies may have been effected over a period of thirty years as customers were systematically duped into taking out policies they did not want, need or that were unsuitable for them. It is plain to see why the banks were so unwilling to admit wrong doing when it is considered the industry brought in around £5 billion a year. Given only 15% of claims against PPI policies ever paid out profit margins were clearly very healthy. Sadly, mis selling PPI became commonplace and unclear, ambiguous guidelines, for many years, seemed to offer a free-pass for lenders to behave unorthodoxly, but still remain within the rules.
PPI stands for Payment Protection Insurance and, whether you realise you have taken out the cover or not, most UK households have, at one time or another; had a policy. It can be referred to by a number of different names including: loan protection; unemployment, accident and sickness cover; and Mortgage payment protection. Some lenders also merely refer to a policy as being 'protected.' The cover is designed to step in and take over repayments if a borrower cannot pay monthly instalments due to redundancy, accident or sickness. The trouble with PPI is that it is expensive, has a high number of exemptions and is not suitable for everyone. A lack of staff training and high commission rates; however, made mis selling PPI all too common.
After receiving numerous complaints from unhappy customers, The Citizens Advice Bureau (CAB) made a formal complaint in 2005. There complaint highlighted some of the major failings within the market and demanded immediate investigation and change. As a result, The Office of Fair Trading (OFT) and The FSA launched their own investigations publishing reports in 2006 which echoed many of The CAB's concerns. Subsequently several banks, lenders and brokers were handed large fines for mis selling PPI or failing to protect their customers from the risk of being mis sold PPI.
Since 2006 over 1.5 million unhappy customers have made complaints regarding the way in which their policy was sold and many have received thousands of pounds in compensation. Many lenders have remained uncooperative, though, with some rejecting almost all complaints as standard. The latest twist in the scandal has been seen as a positive move by many; however, and it is hoped more lenders will now admit mis selling PPI in the past and award customers compensation.
If you believe you have been a victim of mis selling you can register your complaint by completing the claim form above. A pack will be sent out to you in the post to complete, sign and return. Once we have received back your completed pack we will start negotiating with your bank on your behalf. We have already reclaimed more than £50 million on behalf of our customers and are able to resolve many claims in just 8 weeks. If you have any questions regarding mis selling PPI or our process call our team on 0207 471 2000.
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