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Royal Bank of Scotland PPI

Mis sold payment protection has received a lot of press coverage recently following The High Court’s judicial review of new Financial Service Authority (FSA) guidelines. The High Court found in favour of The FSA and, as a result, banks will now have to more closely regulate the sale of payment protection policies.

For many the high court’s decision has been reviewed as a victory for consumers. Following the announcement the several major UK lenders have announced the allocation of funds to resolve future PPI complaints. One of these lenders is RBS. Royal Bank of Scotland PPI policies are estimated to have been sold to between 1.6-2.4 million customers. The lender is thought to have paid out in the region of £200 million so far and has allocated another £850 million.

Royal Bank of Scotland PPI is sold with loans, mortgages and credit cards. PPI isn’t a bad product in itself the issue is the way it was sometimes sold. Two investigations conducted in 2006 by The FSA and The Office of Fair Trading and further investigations by The FSA into the practices of individual lenders revealed a catalogue of errors across the Payment Protection industry. The list below highlights some of the methods of mis-selling revealed.

  • Policies added without the customer’s knowledge.
  • Customer’s led to believe the payment protection was compulsory. PPI was never compulsory it was always an added extra.
  • Customer’s wrongly told taking out PPI would improve their chances of being the loam, mortgage or credit card. The decision whether or not you were given credit would be based on your credit rating and circumstances. Taking out PPI would not affect your lender’s decision.
  • Customer’s pressured into taking cover they did not want or need.
  • Customer’s sold a single-premium policy that would not cover the life of their loan. Most single-premium policies only last for a maximum of five years. Many customers with longer loans were sold single-premium policies without being told it would not cover the life of their loan.
  • Customer’s with a pre-existing medical condition sold a PPI policy they would be ineligible to use.
  • Customer’s over the age of 65 sold a policy that did not offer cover to people in this age category.
  • Customer’s who were unemployed, retired or in full time education sold PPI cover that could only be of limited use to them. PPI is designed to cover the policyholder for the loss of employment. If you were not employed you would have had no need for this type of cover.
  • Customer’s sold cover despite already having cover in place elsewhere.
  • Customer’s sold cover without the full terms, conditions and/or costs being explained to them.

In some of the above examples mis-selling is clear E.g. where a policy was sold to a customer who was ineligible to claim. In other cases, E.g. if terms were not clearly explained it may be more difficult to prove mis-selling.

If you think you may have been mis-sold a Royal Bank of Scotland PPI policy you may be entitled to make a claim. To find out more about reclaiming PPI call 0207 471 2000.

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