The number of people seeking refunds for mis-sold payment protection insurance looks set to rise once more in the wake of The British Banking Association's decision not to challenge a high court ruling supporting new Financial Service Authority (FSA) regulations. The new regulations aim to protect customers from being mis-sold policies, but will also force banks to look more closely at complaints.
Following the decision, banks including Lloyds and HSBC have announced they will set aside substantial funds to deal with complaints and PPI refunds. This is great news for customers many of whom have had their complaints placed on hold for several months while the court's decision was pending. It also means, for anyone who has yet to register their complaint, there is now no better time to submit a claim.
The amount of people seeking PPI refunds has been steadily climbing since 2005 when a Citizens Advice Bureau complaint highlighted numerous problems within the payment protection industry. Investigations by The Financial Services Authority (FSA) and The Office of Fair Trading (OFT) followed and many lenders were fined.
Two of the major issues that emerged from the investigations concerned staff training and processes. It was found many lenders were encouraging staff to sell PPI cover by offering large bonuses, but were not adequately training them. Incentives and a lack of product knowledge meant many salespeople were recommended the cover to every customer even though it is not suitable for everyone. It was also found many lenders had failed to put in place adequate processes and safety nets to protect customers from mis-selling. It is estimated that tens of thousands of people have been mis-sold policies in this way and many of those are now, as a consequence, demanding PPI refunds.
In many cases customers are actually unaware they may be able to claim PPI refunds until they try and use their policy and discover it has been mis-sold and they are not covered. This happens most frequently where a customer has been sold a policy even though their circumstances make them unsuitable. Some common personal circumstances NOT covered by PPI policies include:
People over the age of 65 - Most policies do not cover people over this age. If you were over the age of 65 when you were sold the policy or have since turned 65 you could make a claim and receive PPI refunds.
People with pre-existing medical conditions - Many PPI policies have exemptions meaning they do not cover pre-existing medical conditions. When you were sold your policy you should have been asked about your health. If you had a pre-existing medical condition and were not asked about it or where, wrongly, told it would be covered, you are entitled to make a claim for PPI refunds.
People who were unemployed, retired or in full time education when they were sold the policy - PPI is essentially designed to cover repayments when a policyholder is unable to work due to sickness, accident or redundancy. If you were not in employment at the time of sale this type of policy would be of no or very limited use to you. If this happened to you, you are urged to claim PPI refunds.
Other common ways in which Payment Protection Insurance was mis-sold include:
- The policy being added without the customer's knowledge.
- The customer being led to believe, wrongly, that taking out the policy would improve their chances of being given credit.
- The terms and conditions or costs not being fully explained to the customer.
- The customer not being made aware the policy was optional.
If you are unsure whether you could be entitled to make a claim call our customer care team on 0207 471 2000. Remember, there is no limit to how many PPI refunds you can claim and you can register a complaint even if your loan or credit card is already paid off.
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