The High Street banks of the United Kingdom are looking at a lost source of revenue as the regulator insisted they would still press on with their desire to ban Payment Protection Insurance (PPI) at the point of sale.  The Competition Commission has stated that it will ban the sale of PPI alongside the sale of financial products such as loans, credit cards and mortgages.

This decision means that the banks will no longer be able to sell this highly controversial insurance product at the time they decide to borrow, or during a fixed term after they have taken out the loan.  It has been suggested that most purchasers of PPI had no idea that the insurance was available from insurance providers other than the lender.  This meant that they rarely shopped around for a better deal on price or terms.

The product has also been at the centre of a huge mis-selling scandal.  PPI Claims are on the rise and the amount of mis-sold PPI policies is estimated to be in the millions.

Peter Davis, who is the deputy chairman of the Competition Commission, said: “We found that many customers would place significant value on being given the time to choose the right PPI product – or indeed to decide that PPI is not right for them.”

The ruling that was given mirrors the initial ruling their first judgement which was given last year, when the Competition Commission suggested similar action.  The decision was challenged by Barclays Bank and Lloyds TSB, when a review was ordered by the Competition Appeals Tribunal.   The banks had argued that people were happy to purchase PPI from them at the point of sale and that they would find it inconvenient to have to wait to purchase it after the sale, or to be forced to find an alternative provider of PPI.

However, Mr Davis went on to say “Overall, we concluded that Payment Protection Insurance providers are overstating the loss of convenience that would result from the introduction of a prohibition on selling Payment Protection Insurance during the sale.”

The banking industry are not happy with this outcome, suggesting that bankruptcies may increase as people have no alternative to solve their debt problems as they have no method of repayment.

PPI has generated over £1.5bn per year profit for the industry between 2004 and 2009, which the payments given to the insured are well below other averages when compared to car insurance and home insurance.

The banks repaid £177m compensation to victims of mis-selling in the first 11 months of 2009, with much larger figures expected for next year.

If you have been mis-sold PPI, please visit www.ppi.co.uk to make a claim for PPI Compensation

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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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