Posts tagged: claims

A Long History of The PPI Claims Scandal

In 2007, UK Consumer Rights Group Which? had launched a compounded complaint from numerous consumers complaining that banks had sold them an insurance policy that they were ineligible for from the start. Upon this complaint, the Financial Services Authority had taken action and they had discovered that bank employees had dastardly mis sold the insurance in favour of higher commission.

It did not take long for the FSA to launch a formal discussion with banks about recognising the immensity of the financial scandal and that it needed their full support. Instead, banks launched a legal challenge against the FSA, which the latter won and had PPI claims made simple as banks became cooperative and the Financial Ombudsman’s weight had decreased, but not to a comfortable level.

Mis sold PPI had created a cultural impact in the United Kingdom. Claims management companies, which had sent unsolicited text messages and cold calls to many people, even children, inviting them to have the company represent them to make a claim, had its own share of highly successful and downright swindling stories.

The MOJ had revoked the licenses of hundreds of claims companies because of their upfront fees, misconstrued payment structures and false advertising.

Today, according to the Financial Services Compensation Scheme, PPI has not yet reached its peak. The FOS, which still receives 1,000 complaints daily, reports that it will have more on its plate despite a great reduction on claims from 264,000 the first half of 2013 to 190,000 the second half of 2013. Experts attribute this to the banks’ exploitation of a regulatory loophole called “alternative redress”, which issued a refund for a regular-premium PPI despite the consumer having bought a single-premium PPI.

No Win No Fee Claims: The Kinds of Claims Under The No Win No Fee System

No win no fee claims will be replacing the win/lose no fee by April 2013. The Ministry of Justice’s decision made the decision to reduce the number of fraudulent and exaggerated injury claims presented by claims management companies and personal injury lawyers. Some victims may suffer and be undercompensated depending on the type of claim they have. Here’s how the no win no fee claim system can affect the different kinds of claims.

1. PPI Claims
PPI claims can get customer repayments for a mis sold PPI. Claims management companies offer a standard no win no fee agreement with clients to reclaim PPI. The abolishment of the win/lose no fee claim will not affect PPI claiming much, as refunds, even if 25% is paid to the expert, will be sufficient enough for the customer without any other losses.

2. Medical Negligence
Medical negligence is a serious case a medical professional could commit that could cause severe damages to patients. The costs of medical negligence can reach £10 million including prolonged medical care. However, if the no win no fee claims system is implemented, victims may be undercompensated as the money may not be enough for medical procedures, supplies and sustenance.

3. Car Accidents
Car Accidents commonly include minor to severe injuries. Genuine whiplash compensation claims could leave victims undercompensated for the same reasons as medical negligence. Minor car accident injuries may leave the customer with enough money to compensate for their wages, but not their medical bills.

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