FSA’s New PPI Rules Could See Refunds Of Almost £3 Billion
Nearly three million people with Payment Protection Insurance (PPI) policies could be in line for compensation totalling almost £2.7 billion.
There is expected to be a flood of complaints after the Financial Services Authority (FSA) issued new rules, yesterday (10/08/10), on the way firms should handle complaints about mis-sold PPI policies.
Prior to the new rules set out by the FSA, many firms were automatically rejecting mis-sold PPI complaints, leaving customers to have to turn to the Financial Ombudsman Service (FOS) to resolve their complaints. The FOS has revealed it has received more than 100,000 complaints about PPI already, with nearly 2,000 of these, received in the last week alone. Four out of five cases taken to the FOS were decided in favour of the customer, with the firm selling PPI, having to pay compensation typical of around £1,500.
The FSA has said “Data (received from 18 major sellers of PPI) shows that on average, firms reject almost half of the PPI complaints they receive, but some reject nearly all. Around 30% of rejected complaints go on to the ombudsman, where more than 80% are overturned in the consumer’s favour.”
It is estimated that the number of complaints about PPI will rise to around 550,000 a year for each of the next five years as a result of the FSA’s new rules.
Citizens Advice debt policy officer Peter Tutton said: “We welcome the fact that the FSA is taking firm and appropriate action to get to grips with the harm done to consumers by widespread mis-selling of PPI over many years. Evidence from our CAB network has consistently shown that too often consumers have been mis-sold PPI policies that are far too expensive and completely unsuitable for their needs, often contributing to debt problems. A huge step to restoring consumer confidence is ensuring that people who complain get a fair hearing and proper redress. Up until now, firms have too often handled complaints very badly, so FSA action to spell out to firms what is expected of them was absolutely necessary.”
Incoming search terms for the article:
New PPI Clampdown Measures Announced By FSA Will Cost £3.2bn
The Financial Services Authority (FSA) estimates the cost of its clampdown on Payment Protection Insurance (PPI) could rise to £3.2 billion.
The FSA had previously estimated it would cost £3 billion to reform the PPI market. These cost estimates have been revised as the FSA expects the number of complaints to firms selling PPI will receive to rise due to new sales measures being implemented.
It is estimated firms are likely to receive an average of 550,000 complaints this year rather than the 500,000 complaints estimated by the FSA in its consultation paper on the PPI sector in March.
The new measures introduced to the PPI market will ensure customers receive better information when purchasing PPI and that they are treated more fairly, should they have to complain about the product. Firms selling PPI have until 1st December 2010 to comply with the FSA’s new measures for the sale and complaints handling relating to PPI.
The FSA has said firms could bear costs of between £1.1 billion and £3.2 billion as a result of the measures, with complaints handling procedures to be introduced as part of the rules, making up £800 million to £1.3 billion of the costs.
FSA director of conduct risk Dan Waters said: “With this package of measures we’re confident we can mend a market that has been broken for too long. This remedy is fair to consumers and the industry alike. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.”
Incoming search terms for the article:
FSA Announce New Measures Designed To Reform PPI Market
The Financial Services Authority (FSA) has announced a package of measures designed to reform the Payment Protection Insurance (PPI) market.
The FSA has said the new measures will ensure customers receive better information when purchasing PPI and that they are treated more fairly, should they have to complain about the product.
The package of measures includes a new handbook, that will ensure complaints are handled properly and readdressed fairly where appropriate. It will also explain when and why firms should analyse their past complaints, to identify if there are serious flaws in sales practices that may have affected complainants and even non-complainants.
An open letter will also be put together by the FSA setting out common sales failings to help firms identify bad practice.
Firms must implement the FSA’s new measures by December 1st. They must use the time between now and December to ensure staff selling PPI are trained to a higher level. The FSA has said it will be monitoring firms closely to ensure the new standards are adhered to.
Dan Waters, director of conduct risk at the FSA, has said that with the new measures, consumers will be treated fairly whether they are buying or complaining about PPI.
He said: “Since we took over the regulation of PPI we’ve carried out 24 investigations and three thematic reviews, issued warnings, halted the selling of single premium PPI with unsecured personal loans, visited over 200 firms, and handed out some very significant fines of approximately £13m. Now, with this package of measures we’re confident we can mend a market that has been broken for too long. The onus is now on the industry to ensure it treats all customers fairly. We will be monitoring the implementation of our guidance closely to ensure real change is delivered.”
Incoming search terms for the article:
Tesco Bank Expose PPI Customers To Fraud
Tesco Bank has lost the personal details of dozens of customers complaining about PPI.
39 customers who were in angry dispute with Tesco Bank over mis-sold Payment Protection Insurance (PPI), have had papers containing names, addresses and account details lost, leaving them exposed to a risk of fraud.
The customers’ details have been lost after the data was sent unprotected using the standard postal service.
It is understood the details of the 39 customers have been lost in the post between offices from Manchester to Glasgow.
Tesco have blamed a service provider for the data loss. A Tesco Bank spokesman said: ‘Tesco Bank and the service provider have robust rules and procedures for handling customer information.
‘There is no record of the correspondence being sent by courier or recorded delivery. That leaves the possibility that it was sent by standard mail, contrary to ours and our suppliers data handling procedures.
Prior to the data loss, the customers had been in the process of complaining to Tesco Bank about PPI on which they could not make a claim.
Incoming search terms for the article:
FOS Figures Show PPI Most Complained About
PPI has topped the list for complaints to the Financial Ombudsman Service (FOS)
The FOS has published quarterly data for the first time, which shows inquiries about Payment Protection Insurance are the biggest source of complaints.
Figures show there were 13,520 complaints about PPI in the first three months of the financial year, with 81% of these resolved in favour of the consumer.
The number of complaints about PPI were more than twice the amount of complaints about current accounts, which was next on the list with 5,420 complaints. Third on the list was credit card accounts, with 4,296 people making queries.
Incoming search terms for the article:
PPI Sale Restriction Plans Set To Save Consumers Money
PPI Sale Restriction Plans Set To Save Consumers Money
New legislation put in place by the Competition Commission will restrict the sale of Payment Protection Insurance (PPI) at the point of obtaining finance. The ruling will be bad news to High Street banks, who are set to lose an important source of income, but a welcome move to consumers.
The ruling will see regulators from the Competition Commission restricting banks from selling PPI to customers at the time they borrow and for a fixed period, possibly 14 days, after.
The Competition Commission has reported currently 75% of all mortgage PPI policies are sold at the time of obtaining finance and that many borrowers are unaware Payment Protection Insurance is available from outlets other than the lender.
The new legislation will mean more consumers saving money, as they realise they have the opportunity to shop around when it comes to purchasing PPI.
Incoming search terms for the article:
Fears that Payment Protection Insurance will no longer be considered
A report by consumer money comparison website Moneynet has expressed fears that Payment Protection Insurance (PPI) will no longer be considered by customers obtaining finance.
Mis-sold policies
PPI has a tarnished reputation due to a large number of policies previously being mis-sold. Many customers are now apprehensive about purchasing this insurance. There is a danger that if lenders become prohibited from selling PPI cover at the point of sale, many customers won’t even consider this insurance.
PPI is still ideal for some
Despite its tarnished reputation, PPI is still a valuable safety net for those who need it, covering borrower’s monthly payments if they are unable to work due to being made redundant, falling ill or having an accident; Payment Protection Insurance is still an ideal product to consider.
People should still protect financial commitments
With warnings given by David Cameron for painful and unavoidable cuts to reduce the UK budget deficit, there will be fears that jobs may go. PPI is not an ideal product for everyone, but with fears of redundancies, it can be a good way for people without other insurance cover to protect their financial commitments.
Do you qualify to claim PPI payments back?
If you have taken out a mortgage, loan, credit card or have obtained finance on any high value item in the last 10 years, there is a good chance you have a Payment Protection Insurance (PPI) policy. But did you know you had taken out a PPI policy? The Financial Services Authority (FSA) have launched a major crackdown on financial providers after finding millions of PPI policies over the past 10 years have been mis-sold to customers. You could have Payment Protection Insurance and not even know it!
Why would have payment protection insurance been miss-sold though? Research shows that banks and other financial providers encouraged sales employees to sell PPI policies by providing greater bonuses and other incentives. So often PPI was sold alongside mortgages, loans and credit cards by any means necessary, even if it meant ruthless tactics and misleading customers.
Some of the common sales tactics for selling PPI include:
- You didn’t ask for a PPI policy but it was sold to you anyway, without the cost being stated at the point of sale.
- Informing you payment protection insurance was compulsory or that purchasing it would improve your chances of getting a loan.
- Not being told PPI is optional or that a cheaper policy could be purchased elsewhere.
- Not asking you if you already have alternative payment protection cover, such as income protection, employer illness cover or a redundancy package.
- Not being informed the PPI policy is limited and will not cover the entire duration of your loan term.
Shockingly, the FSA have found that some customers seeking finance have been sold PPI even though they would never be eligible to make a claim.
Typical cases where you would not be eligible to make a valid claim on a PPI policy include:
- If you were unemployed or retired at the time of the insurance policy being taken out.
- If you are self-employed.
- If you were employed on a temporary or contract basis or worked less than 16 hours a week.
- Many policies have an upper age limit, usually 65 or 70, if you were older than this age at the time of being sold the policy, you would never be eligible to claim.
- If at the time of being sold the policy, you had a medical condition or an existing illness that could stop you from being able to work.
If you believe you have been the victim of ruthless sales techniques or fall into any of the unfortunate categories where you would not even be eligible to claim, there is good news, you do qualify to claim PPI payments back.
Incoming search terms for the article:
- nationwide credit card ppi (2)
- nationwide ppi reclaim (2)
- tips for to put a sale in u k for ppi (2)
- can i claim PPI back even though i was told ABOUT IT (2)
- if you had a loan in past ten years can you claim (1)
- ismart paying your 25% back how do you do it ? (1)
- ive never had a loan before do i qualify for a claim ppi (1)
- nationwide credit card payment protection insurance claim (1)
- how do you know i you are paying ppi (1)
- nationwide credit card service- payment protection claim (1)
- Categories
- Finance
- General
- PPI
- Archives
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- Links
- Documentation