Posts Tagged ‘payment protection insurance’
Consumers should feel secure that their Payment Protection Insurance will cover their debt repayments if something unexpected happens they are covered for, but more and more people are feeling like it is one big con. It has been sold to people who are uninformed borrowers who can’t afford it and even people who want it but don’t know they are ineligible.
Most banks cunningly tag on PPI to any loan or credit and bank employees are often forced to sell useless policies in order to keep their jobs. The theory of PPI is great for borrowers, particularly in the recent economic hard times, where people are losing their jobs left right and centre, it should mean that 3 months unemployed doesn’t mean going hungry because of mortgage repayments. But the reality is quite the opposite; there have been almost no cases where PPI has actually helped someone struggling to make repayments.
Fortunately justice can be served and banks and lenders who have mis-sold PPI can be held responsible by the everyday consumer. There is a variety of companies who are able to help with financial lawsuits and many companies who specialise in reclaiming PPI payments.
The majority of consumers don’t fully understand the variety of situations in which being sold PPI is illegal, for example; if you were unemployed, self-employed or simply over 65, your PPI payments were invalid and you can recover all the money. If you were not explained the terms of payment, interest and cancellation and if you were informed you could only purchase PPI from your lender, ask for it back!
It is your own responsibility to reclaim PPI payments but now the Financial Services Authority and the Competition Commission have cracked down on the industry’s dodgy tactics. They will now fine any organisation who has broken rules on PPI selling.
In 2009 a watchdog ruled that companies are now required to accurately sell PPI to customers ensuring they are not overpriced, customers can chose to opt out at any time and they are completely covered.
If you think you have been miss sold PPI, then see if Dons LLP can help you with your PPI claim.
PPI claims have cost the payment protection insurance industry millions of pounds over recent years. But why are people reclaiming the money they have spent on such policies in the first place?
Let’s start by examining the product itself. Payment Protection Insurance, as its name might suggest, is designed to protect those who take it out. It is essentially a type of insurance for consumers taking out mortgages, credit cards, hire purchase agreements, loans and other financial products. The concept of PPI is that the consumer is protected if circumstances that are not their fault, (such as a cut in income caused by redundancy or illness) mean they find themselves unable to meet their monthly repayments. This, surely, sounds like a wonderful concept? And in theory, it really is.
The controversy surrounding Payment Protection Insurance isn’t the actual product, rather the way that lenders and providers have been selling it. It has recently come to light that a large number of people have been sold policies after being led to believe that applying for one would increase their chances of acceptance in their applications for loans or credit cards. There are other scenarios in which consumers were led to believe that PPI was compulsory.
This is just two of the many examples of PPI mis-selling. Others include people being sold policies on which they would never actually be able to claim on, for example those who were unemployed, self-employed or retired at the time of taking out their policy. There are cases of people not being given time to read the terms or others only finding out they even had PPI months later! The list goes on.
Any company which sells or brokers any form of financial product or service to a consumer has a responsibility to make sure that the said consumer is completely aware of the terms. In the cases that have emerged in recent years, the lenders and brokers have failed and this is why there are now so many PPI claims taking place.
Read more about PPI Claims and find out if you could claim today!
If you have taken out a mortgage, loan or credit, it is likely that your lender sold you payment protection insurance. PPI is designed to help customers repay debt should they find themselves in difficult circumstances such as becoming unemployed or getting injured, however, the lenders found a loophole and have been selling PPI to customers who were not eligible for the cover or who did not fit the particulars of the PPI they were sold. If you have paid for PPI, whether you tried to use it or not, you may be entitled to claim this money back. What you may not be aware of is why you could be eligible to claim and why the banks could face a huge wave of payouts
The common misconception is that everyone is eligible for PPI but this is not the case. If you are older than 65, the age of retirement, you would never be entitled to claim PPI as you are likely not in full time employment. If you are self employed you are technically considered a financial risk and no PPI policy would offer to cover you ability to make repayments. If you have a historical medical condition you will be unlikely to be able to get PPI cover as you are more likely to be forced off work. Despite this, banks are more than happy to sell PPI to everyone knowing full well it will never cover them if needed.
This situation has continued with the full knowledge of the Banks and lenders, something which financial watchdogs have frowned upon very much. The government has forced many of the UKs high street lenders to offer refunds to their customers but some have adopted a ‘don’t ask – don’t get’ policy meaning the consumer has to go on the hunt for their money either alone or with legal assistance.
The first stage in attempting to reclaim your PPI payments is to send your bank a letter requesting a full refund. From this you will receive a long winded ‘no’ to which you will need to duplicate your first letter in addition to declaring your intent to pursue legal action and support from the financial ombudsman. Your requests will be met with a variety of answers ultimately dismissing your claim on the basis of your lack of authority. The key is perseverance and it will significantly help your chances if you do get the ombudsman involved. Ultimately if all else fails, enlist professional help.
The easiest way to claim back your PPI is to use a legal agency as they know what they are doing and will be able to take care of everything for you. This will be much more effective than pursuing the matter yourself and will most likely end in success. Many solicitors are no win no fee so there is no disadvantage to using them.
There are many companies that offer or specialise in PPI claims and they are fully capable of taking control of everything you need for your loan protection claim
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It is estimated that over 4bn to customers who were fooled into paying for Payment Protection Insurance on a loan, mortgage or credit could be paid by banks and insurance companies. Experts previously estimated that customer who attempted to reclaim the payments could cost banks up to 1.2bn only but this new number includes the additional amount of customers who the banks will be forced to give refunds to.
Hundreds of thousands of customers were sold very expensive policies but would not be able to claim if they needed to. Among those who were convinced to buy policies were pensioners, the self-employed and those with long term medical conditions who, by definition, were ineligible for cover.
An estimate by the Financial Service Authority shows insurance brokers may have to pay up to 450m and the rest being paid by a range of PPI providers such as banks. The typical amount refundable to people who purchased individual policies is 2000 which has caused many consumers to enquire.
The FSA has already begun to make examples of leading high street banks by fining them as well as forcing them to offer refunds to all of the eligible customers. Leading insurance broker ‘The Swinton Group’ were fined 770,000 for serious failings and agreed to offer a full refund to over 350,000 customers while Alliance & Leicester were fined 7m.
Financial giants are strongly opposing the plans to regulate and control the future sale of policies. The FSA aims to stop companies putting pressure on customers to buy ineffective policies. Adam Phillips of the Financial Services Consumer Panel, says “for too long banks have regarded PPI as an easy product to sell and make money without considering whether it is really right for the customer
If you think you are entitled to a PPI claim, then visit Dons LLP for the best PPI claims lawyers.
