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.
The mis selling of PPI began during the 1990′s when the product was first introduced to the UK market. Banks incorrectly marketed the product into their financing services. As a result, millions of UK citizens were mis sold PPI. The Financial Services Authority validated this as fact in 2005. The complaints of many customers and consumer groups led to the investigation of the sales methods of banks, which proved to be unfair for customers. Banks recently provided a £3.2 billion compensation package for the entire UK for their mis selling. In order to receive their part of money from the package, UK citizens must file PPI claims as soon as possible.
PPI or Payment Protection Insurance is intended to protect borrower’s loans from incurring large interest rates and late repayments in the event they encounter loss of income or financial problems. Single premium PPIs can provide loan repayments in case borrowers become extremely sick, have severe injuries from fatal accidents or become unexpectedly unemployed. The PPI requires their holders to remain healthy for a particular period of time before they can receive their benefits. They must also be within the claiming age to receive it as well.
Many UK citizens complained about bank representatives who did not thoroughly explain the PPI’s terms and conditions. This is clearly a violation of law. The Financial Services Authority states that bank representatives and insurance brokers are responsible to make clear to their customers all details of the products they provide. Banks also stipulate the requirement of loan security. It is reported that banks favoured secured loans, which is unfair according to consumer groups. They state that banks should only approve loans for applicants who have suitable financial capabilities.
Experts state that banks earn as much as millions per year because of mis sold PPI premiums. Ineligible customers, those who purchased the PPI even if they initially had medical conditions, were unemployed or self employed or beyond the claiming age, were forced to forfeit their premiums to banks. Bank representatives, earning through commission, also earned a lot in PPI mis selling. Banks earn more through the penalty fees of late-paying customers because of mis sold PPI. The added PPI repayment amounts increase the likelihood of customers to pay late.
If you intend to get all your refunds through a PPI claim, it is best that you consult with www.ppico.org.uk. They have the experience, expertise and knowledge to make your PPI claim work in the best manner for you. Ensure that you are working with a no win no fee claims handling service to help you get the refunds you deserve while not placing your finances at risk.