PPI Claims and the Labour Party
The Labour party have pledged to clampdown on banks that taken advantage of their customers as part of its Election manifesto.
The Labour party is focusing, in particular, on PPI Claims and Bank Charges. The reason for this is that this cheap talk will work wonders with the average man and women in the land with regard their finances.
Labour have been happy to bail out the banks but also have been weak with their so called obligations, including hitting lending targets to businesses and individuals, but on the other hand, Labour have allow banks to systematically mis-sell and rip off clients over the last 10 years. Labour was supposed to protect the vulnerable and create a ‘fair society for all’ – both in the past and in the future. Too late Gordon, the horse has bolted and has also been shot dead by the Supreme Court last November. I am sure you are aware of this fact.
Anyway, the Financial Services Bill has been watered down (the banks threatened legal action basically) – so until there is a change of Government, this will be reviewed in the future. What is becoming increasingly clear, is that the banks do not negotiate and everything has a price. We all knew this, but deep down society should not be like this.
PPI Claims is the bain for the banks at the minute. They have rolled over and accepted that there may have been failings in its PPI sales. I’ll name a few
- Adding PPI to loans and credit cards without their knowledge – a nice kickback for the salesman.
- Pressuring people to accept loans and credit cards with PPI – because this will increase their chance of getting the loan accepted.
- Not explaining that the PPI was optional and not compulsory at the point of sale
- Upfront premiums ‘lock people’ into unfair agreements and this stopped cancellations and switching
- Offering a poor product at an extortionate price
- Selling the insurance to the unemployed, disabled or self employed
The reasons mentioned above account for most mis-sold PPI Claims and have not changed. We have seen an increase in the number of people saying that they were pressured into accepting the insurance, but they were not prepared to say so. That is where i-Smart Consumer Services can help – we create a voice for people that wish to use a 3rd party to make claims.
We have handled tens of thousands of PPI Claims over the last three years and are recovering over £2m per month for our clients. This is your money and this should be in your pockets and not the banks.
Gordon Brown wants to create a fair society, but let’s be honest, he has built the Country up on huge personal debt, and where there is debt there are banks, which in turn leaves vulnerable people easy prey for the lucky few; this is Labours legacy and this is partly to do with the lack of regulation by the FSA, which reports to the Government.
There is no room for politics in our game, so whatever your political slant – vote for one thing, your money back from the banks – vote i-Smart Consumer Services. Think Smarter.
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The new PPI Claims Process
The new PPI Claims Process
The Financial Ombudsman has pushed through the new process for handling PPI Claims for both Consumers and businesses that receive complaints about mis-sold PPI. This process has been designed to help the Ombudsman handle complaints that have not been resolved between the two parties and have reached deadlock.
The new forms for the consumer capture all the information required for the bank and Ombudsman to understand the prejudice the customer may have endured at the point of sale. There is no denying that PPI is a poor product that did not help the people that needed it the most. The banks know this, the FSA know this, but PPI was pushed on millions of people by highly bonused sales people and the mis-selling was rife.
Hopefully the new consultation can go ahead and the banks can start to act properly when making redress to customers. I do not think for one minute that any ethics in terms of what they have done (including the ethical bank CO-OP) have been put on the table, with the analysts working around the clock to reduce liability the more likely event.
With this in mind, it is likely that the levels of PPI Claims will increase to levels that will never be surpassed by any other mis-selling claims. There are millions of policies in existence and the levels of compensation have been estimated in the billions. Most people will know of someone with a PPI Claim on a loan or a credit card. Credit Card PPI is likely to be very high in terms of the redress available where the banks cannot prove how the insurance was sold if there records are not robust enough.
With the levels of claims management companies increasing, the awareness of PPI will inevitably increase as more media and internet search marketing will increase. This should see the word of mouth for PPI Claims increasing, which will perpetuate the levels of claims. It has been anticipated that the peak will be in 2012 and should return to zero within 5 years.
I will call this now; you can expect a time bar on making claims when the banks and the FSA have worked out their liabilities, which will be based on their learning over the coming year. They will create this time bar at the best possible point to reduce any redress that will be available. I really hope this does not happen.
PPI Claims will increase, so if you have not made your claim yet, please visit www.ppi.co.uk and make a claim
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PPI, it’s still a protection racket
PPI, it’s still a protection racket?
When you take out your mortgage, loan or credit card you are persuaded to take out payment protection insurance as ‘peace of mind’. Let’s say it costs around £30 per month, which you pay year in, year out up until the day you really need to make a claim. You are one of the thousands who has been made redundant, suffered a sickness or and accident meaning you are unable to work. The premiums are then raised by the provider or the cover is withdrawn.
Lord Turner, the FSA chairman described much of what the city does as “socially useless”, this phrase should be applied by lenders at the point of sale for a PPI Policy.
Banks are estimated to make up to 80% profit on PPI premiums; Barclays for example made, in 2001, 10% of its global profits from the sale of PPI. A figure that analysts have also attributed to the accounts of Alliance and Leicester, TSB and Lloyds when PPI sales were at their height.
A record £10m fine(reduced to £7m for early payment) was handed to Alliance & Leicester in 2006 after the FSA began investigating the industry for the mis-selling of PPI policies sold against personal loans. Several other lenders were also handed penalties as the FSA levied fines.
Even after the levies the PPI steam train stills rattles along, Which? Discovered that only 28% of premiums collected on mortgage PPI (also called accident, sickness and unemployment insurance or ASU are ever paid out in claims. This statistic alone means you should think about your PPI charges stacking up month on month.
Were you missold? Could you be owed £2000+? It’s time to think smarter & Claim Today!
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The Truth About Payment Protection Insurance (ppi)
Posted: Jan 30, 2008 on Articles Base by Michael Morgan
Payment Protection Insurance or PPI is loan insurance designed to protect your Mortgage, Credit Card and Loan payments in the unfortunate event that you cannot work because of an accident or sickness, or if you have been made unemployed.
Like a career criminal, PPI has many names and aliases, such as Accident, Sickness and Unemployment (ASU), Life & Accident, Sickness and Unemployment cover (Life & ASU), Mortgage Payment Protection Insurance (MPPI), Personal Loan Protection (PLP) or Credit Card Repayment Protection (CCRP). Policies are usually sold when a consumers applies for a credit card, loan or mortgage, although ‘stand alone’ policies which are not linked directly to a specific credit product are also available.
In theory, making provision for maintaining your loan repayments if you cannot to work is a laudable financial planning aim and there is nothing inherently wrong with PPI. It can be highly beneficial to many consumers who specifically need protection in case they are unable to work, helping policyholders avoid defaulting on their loans and possible repossession of their home.
Like all insurance products, the devil is in the detail. PPI is riddled with clauses, limits, exclusions and exemptions, which preclude claims about many common causes of absence from work, such as back ache, stress or depression. In addition, consumers who are self employed, on short-terms contracts and agency work are not usually covered. As a result, 1 in 4 of all claims made under PPI policies are rejected by the insurer, due to exclusions and limits in small print of the policy.
In addition to strict policy exclusions that made the policy useless for some consumers, PPI sold by lenders together with Loans, Credit Card, Mortgages and on high-street or catalogue “Buy Now-Pay Later” deals offer extremely poor value for money and are exceedingly expensive when compared to ‘stand alone’ policies. Consumers who needed and were eligible for PPI would have been better off shopping around to get a policy from a ’stand alone’ provider, which can be less than 15% of the cost of policies arranged by the lender. Recent research by MoneyFacts revealed NatWest PPI added £3,267.60 to a £10,000 loan, whilst a similar ‘stand alone’ policy provided by British Insurance costs only £468.
Selling PPI alongside every application for credit has become common practice in recent years. The Citizens Advice Bureau (CAB) estimates there are over 20m PPI policies in existence, with over 7m being sold each year. Therefore if you have taken out some credit in the last few years it is likely that you have a PPI policy, although many consumers don’t actually realise they were sold this insurance or realise how much it is really costing them.
It is not surprising that lenders train their staff into selling PPI at every opportunity, rather than advising their customers according to their needs and circumstances, as industry insiders state 17% of some high street lenders total group profits came from the sales of PPI. A recent report stated only 20 per cent of the money collected in PPI premiums is returned to policyholders who claim, which means insurers and lenders keep about £4bn of the £5bn paid in premiums annually, making PPI the most profitable type of insurance to sell. The Competition Commission has revealed that lenders can make a staggering 982% return on their costs by selling PPI.
The Competition Commission issued a report into the ‘Profitability of PPI’ on 28th January 2007, stating “The personal loans business has suffered from declining profits in recent years, to the point where in 2006 it appears to have been loss-making before taking into account income from PPI.” It is clear therefore that selling PPI is essential to arranging loans.
As with other financial products, the major problem lies with how the policies were sold and whether the insurance was suitable for the consumer. Many policyholders have been sold PPI when they had no chance of successfully claiming under the policy, as they had been to the doctors several times with a stiff knee or they had not been employed on a permanent contract. In most cases, the salesperson simply did not ask their customer about their circumstances, which explains why we regularly deal with complaints from foreign residents, people on state benefits and full time students.
According to our experience, most consumers were not made aware of the alternative ’stand-alone’ policies, or the various policy exclusions. Some were told that they would improve their credit rating, receive a lower interest rate or be more likely to be accepted. In some cases, the customer was told it was compulsory or didn’t even realise that they had been sold PPI.
One of the major inconsistencies with PPI are Single Premium policies. A Single Premium PPI policy is where the whole cost of the insurance is added as a lump sum to the amount borrowed, so you’re effectively borrowing more initially, which then must be repaid over the term of the loan plus interest. This makes Banks an extra 10-18% per year in interest (See Competition Commission report) and makes little allowance if you wish to repay the loan.
It is no wonder that the Citizens Advice Bureau (CAB) have called selling of Payment Protection Insurance a ‘Protection Racket’ and the head of the Office of Fair Trading (OFT) has said “Many customers are failed by payment protection insurance, which gives them a poor deal and often less protection that they think.” The prevalence of such sales tactics has resulted in one industry analyst estimating that upto 70% of all PPI policies were mis-sold.
The good news is that consumers who have been mis-sold PPI can claim a refund and Victory Claims Ltd are specialists in handling complaints about financial products such as Payment Protection Insurance. If you have a PPI policy and would like to know how to start your claim, visit www.victoryclaims.co.uk/PPI_Home.html, call 0871 218 1206 or email michael.morgan@victoryclaims.co.uk.
Victory Claims Ltd (www.victoryclaims.co.uk) is a Professional Complaints Handling Company that helps consumers secure redress from financial institutions for losses suffered as a result of the advice they received. Victory Claims Ltd is regulated by the Ministry of Justice in respect of regulated claims management activities. Our registration is recorded on www.claimsregulation.gov.uk. We are also registered with the Information Commissioner to ensure security & confidentially of your personal information, under the Data Protection Act.
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