There’s been a lot of coverage in the news recently about ‘PPI’ (Payment Protection Insurance). It has been described as one of the biggest financial scandals in theUKhistory, but unlike some of the other recent scandals to make the news, this does not concern the super-rich but potentially anyone who has ever had a loan, credit card or mortgage, or has bought anything on credit.
According to some industry watchers it is not unfeasible that more than five million people are eligible. Some estimates suggest that 16.1 million policies have been sold since 1995, and of those that do make a claim for a refund, the average payout is £2,750. Are you one of them? If so, do not delay in claiming back what is rightfully yours…
What is Payment Protection Insurance?
Also described as ‘Accident, Sickness and Unemployment’, PPI was sold to cover loan, credit card and mortgage payments for customers who became unable to work or had lost their jobs.
That makes sense, so what’s wrong with it?
The way in which it was sold (or rather, mis-sold) meant that millions were unaware that they even had a policy, and so were paying thousands of pounds for cover that they did not agree to have. Millions of policies were also unsuitable for the people that bought them – because of terms and conditions that were not explained to them. Another common example of mis-selling was customers being told that they had to take out PPI in order to get the loan or credit card they wanted – they didn’t…
That sounds terrible, how long has it been going on for?
Some reports say that 16.1 million policies have been sold since 1995. Citizens Advice made a super complaint about how PPI was being mis-sold in 2005 and since then there has been a rapidly growing number of claims for refunds, and complaints to the Financial Ombudsman Service (FOS). By 2009 the FOS was dealing with more than 800 complaints a week. Latest reports say it is now receiving more than 5,000 every week.
How much could I claim back?
The average refund is worth £2,750, but some are many times more than this.
How do I know if I have PPI?
Check through all your credit card or loan documents carefully.
I think I have PPI – how do I claim?
You can contact your lender directly and make a clear written complaint, or you can employ a company like Brunel Franklin to do all the work for you – and with all work done on a ‘no win-no fee’ basis, you will pay nothing unless you are successful.
So why has this been in the news so much?
Since the super complaint by Citizens Advice in 2005, the banks have been heavily criticised in various reports by the Office of Fair Trading, the Financial Services Authority, the Financial Ombudsman Service, and the Competition Commission. Yet they refused to admit they had done anything wrong and even continued to reject many legitimate complaints by dis-satisfied customers.
This eventually led to the Financial Services Authority (FSA) issuing instructions to the banks in 2010 for them to improve the way they were handling complaints about PPI. The banks took the FSA to court in October 2010 to challenge these instructions. They then used the court case as an excuse to stop paying out refunds for seven months.
What happened in court?
The judge threw out the banks claim. This was announced to the public on 20th April 2011. The banks had until 10th May 2011 to appeal against the court decision. Then Lloyds TSB announced on 5th May that it was withdrawing from the legal action against the FSA. This was followed by Barclays and eventually the British Banker’s Association confirmed on Monday 9th May that it would be dropping the legal action entirely.
So what does this mean for my PPI claim?
Your bank will now process it in due course according to the guidelines issued by the FSA.
How big is this ‘massive’ backlog exactly?
No-one knows exactly but the Financial Ombudsman has received more than 200,000 complaints to date. To put it another way, Lloyds TSB alone has set aside more than £3 billion to pay off PPI refunds, and the total bill for the banks is reckoned to be more than £9 billion.
So it’s worth me checking to see if I have PPI then?
In a word, yes. Good luck and don’t let them get away with your money.
Sally Bowyer, Managing Director of Brunel Franklin said: “Everyone accepts that banks provide a valuable service and are entitled to make fair and reasonable charges for services. But people shouldn’t be sold PPI without being furnished with the full facts. PPI mis-selling cases serve as timely reminder of how careful we all need to be when taking out new loans and other credit card agreements.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.