PPI Claims Direct

Introduction

PPI or Payment Protection Insurance is very much in the news right now with many consumers puzzled by the barrage of adverts on radio and television urging them to reclaim their miss-sold policy payments. Many of us have also received spam emails and texts quoting large amounts of money that we are due, confusing us further as we have not made any enquiries concerning miss-sold PPI or any possible refund due to it’s miss-selling. The whole subject is a minefield with consumers being bombarded with sometimes incorrect information by rogue companies who are only out to make money, while not having the customer’s best interest at heart. Customers who have loans or credit cards now, or had them in the past, need to familiarise themselves with PPI plus what is the furore surrounding this type of insurance?

What is PPI?

Payment Protection Insurance as it is most commonly known is an insurance policy that enables borrowers to insure the repayment of loans, should the worse happen, rendering them unable to keep up payments. Also referred to as Loan Repayment Insurance or Credit Insurance it gives borrowers that peace of mind in that if due to unforeseen circumstances such as death, illness, redundancy or disablement they are unable to continue paying off their loan it will be taken care of for them. It sounds great but unfortunately it isn’t as wonderful as it is purported to be.

PPI is sold to consumers by lenders such as banks or other credit providers and is added onto the loan plus interest making the repayments much higher than they would otherwise be. The strange anomaly regarding PPI is that even though it is the borrower that pays the premiums every month it is the lender that benefits if a claim is made with the money from such a claim awarded to the lender. Generally PPI will cover a customer for a twelve month period as it is expected that for instance, if a borrower loses their job they will find another within that time or if they become ill they will recover also within the time scale. As we know it all sounds good in theory but life has a habit of veering from the normal path throwing unexpected obstacles in the way meaning that sometimes twelve months of cover is not sufficient.

The problem with PPI is assessing the products suitability for the customer. Also each scenario is different making PPI totally unsuitable for certain consumers and their circumstances. A person’s contract of work can affect what amount of money they will receive if made redundant with some workers being paid money for untaken holidays or in lieu of notice which can affect whether PPI would pay out or not. Anyone considering taking out PPI must consider it very carefully ensuring that they have all the facts before signing up to the policy.

Why is PPI Controversial?

The main reason that PPI has become a controversial subject is the fact that above all other types of insurance it is the one that is found to pay out the least, with consumers having their claims rejected in high numbers. Other types of insurance also reject claims but not to the extent or proportion that PPI insurers have done. This is mainly due to the fact that borrowers have taken out the insurance without being adequately informed regarding its limits or whether it is suitable for their needs in the first place.

PPI also has a very stringent terms and conditions policy adding to its growing unpopularity. To site one example, many policies did not pay out for the first thirty days of a claim. This is a little like having an excess on a contents insurance policy whereby you may not receive the first £100 of a claim. So if a borrower was off work for five weeks they could only actually claim for the fifth week meaning that the first four weeks were not covered. If you did not get paid while sick or your sickness payment did not cover your outgoings you would then face a shortfall.

It also came to light that unlike other types of insurance borrowers were not asking for PPI they were being sold it as a mandatory part of taking out their loan, were being told it was compulsory by unscrupulous sales staff, while in some cases it was added to loans without customers even knowing about it or being consulted. Some 40% of sales were found to have been dealt with in this way making the whole debacle a scandal for the consumer. When we realise that millions of policies were sold in this manner we understand the huge scale of the problem plus the huge amount of money that was being made by banks and other lenders.

PPI was a huge money maker for lenders with millions of pounds worth of cover being sold along with loans on the same day. The profit margin on these products is phenomenal being usually around the 80% mark plus promises of good commission just fuelled the enthusiasm of sellers. Lenders found that PPI on loans would actually make them more profit than the loan interest payments further fuelling the compulsion to sell it to unsuspecting borrowers.

Companies are Penalised

Many well know banks and lenders have faced huge fines because of their miss-selling of Payment Protection Insurance by the FSA or Financial Services Authority. One such bank was The Alliance & Leicester who were fined £7 million mainly due to their miss-selling by telephone sales staff (they have now been acquired by Santander. The FSA found that advisors failed to furnish their customers with facts and figures regarding PPI at the point of sale. They were also found to sell PPI inappropriately to customers who did not require it while also putting unnecessary pressure on them to take it up.  Alliance and Leicester were one of the major offenders when it came to the miss-selling of PPI.

Capital One is another offender, being fined for miss-selling of PPI on their credit cards. They were fined £175,000 by the FSA for not guarding their customers against being sold PPI improperly. They also were guilty of not providing adequate information regarding PPI. Egg the internet bank was another company that was fined by the FSA. Egg credit cards now belong to Barclays while their mortgages were taken over by Yorkshire Building Society. If you think you may have been miss-sold PPI on a loan or credit card you must contact the lender in the first instance.

Am I Eligible to Claim /How Do I Make a Claim?

As long as consumers understand the facts surrounding PPI it can be an asset when it comes to peace of mind when borrowing money. Those of us who have been sold it in the past without understanding fully the implications, cost plus terms and conditions may be entitled to a refund. So who is eligible to claim and how do they go about it?

Customers who have been miss-sold PPI come under the following criteria.

  1. Were you told that PPI was mandatory or that you would not be able to borrow the money without it?
  2. Did the seller explain that PPI purchase was optional, if not they should have done.
  3. Did they hard sell PPI to you making it awkward to say no?
  4. Did they add PPI to your loan without your knowledge?
  5. Were you self employed? If so you should have been made aware of any exemptions
  6. Did the seller ask you about any illnesses or medical conditions you might have had?

All these questions should have been asked along with in depth discussion on your eligibility, whether the policy was appropriate for your needs and circumstances, while pressure sales is frowned upon when it comes to this type of policy as the customer may end up signing up to a policy that is wholly inappropriate.

When you have looked over your policy and agreement if you have one, you may still not be sure as to whether you can apply for a refund. Go ahead and apply anyway, you have nothing to lose with only a refund plus interest to gain if you succeed.

Firstly write to your lender enclosing paperwork plus any other information you can furnish them with that you think will help with your claim. Always send things recorded delivery and keep copies. Even if you can’t get your hands on paperwork it does not mean that you won’t be able to make a claim. Money Saving Expert.com has an excellent template letter for you to download ensuring things are worded correctly.

The Financial Ombudsman

When your lender replies you may not be satisfied with their findings. In this case you can consult the Financial Ombudsman. Put your complaint in writing stating the facts plus why you are unhappy. The Financial Ombudsman works independently from all other financial institutions ensuring a fair and unprejudiced judgement or finding is reached. Once the Ombudsman has come to a decision you must then accept his findings coming to an agreement with your lender. The majority of decisions made by the Ombudsman are in favour of the consumer so it is definitely well worth consulting him if you are not satisfied.

PPI and Cold Calling

As miss-sold PPI is the controversy of the moment many companies have jumped at the chance to make money on the back of it. We have all had telephone calls on our mobiles or landlines where a recorded message will ask you not to hang up as they have valuable information regarding your PPI claim. You may have had spam emails or texts on the subject too leaving you wondering how these people got your number and details. While being prompted into making a claim is not all bad it is advisable to be aware if not wary of cold callers who lull you into a false sense of security before going in for the kill where you find yourself agreeing to their proposals. In some ways they are in the same league as the sellers who duped you into the PPI product itself.

As to how they got your details in the first place? It is well known that many companies will share details of their customers passing on phone numbers and email addresses. You may have been on a site looking around for insurance of some kind keying in your private details? It is always good to remember when typing in information regarding yourself to watch out for tick boxes that you have to un-tick so that your details will not be passed on. Some companies do state that they will not share your details and so in this instance they should abide by what they have stated.

Should I Claim Myself/Use a PPI Claim Company?

There are so many adverts out there for companies who will represent you to claim back your miss-sold PPI. You cannot walk through a shopping mall without being accosted by said people who in some cases can be aggressive and overbearing insisting that you give them five minutes that turns into thirty five, if you give into their bullishness and stop to talk.

Consumers who have not clued themselves up regarding PPI can easily be persuaded to let these companies represent them being ignorant of how easy it is to follow the process through independently. These companies do not represent consumers for love, they do charge for their services, while 25% or even 30% of your award can end up in their hands if your claim is successful.

For Financial phobic consumers claim companies can play their part. It is not everyone that will feel comfortable having to deal with the officialdom of financial institutions feeling intimidated and sometimes out of their depth. In such cases letting a representative take the strain, doing the work for them, is a good alternative. Consumers must take into account the following factors when opting to use a representative.

  1. Does the company offer a no win no fee service?
  2. What are their charges?
  3. If they quote percentages as charges, a percentage of what?
  4. Do they have hidden charges such as admin fees?
  5. Investigate the company’s performance in terms of successes gained
  6. Look for written testimonials
  7. Find out where their advisors were trained, who by and what are their qualifications?
  8. Is the representative company looked over by The Ministry of Justice

There is also plenty of help out there when it comes to going it alone. The Citizens Advice Bureau has lots of guidance and information along with forms to download to assist you in your claim. For useful information or advice go to:

  • Advice Guide
  • Another source of superb information regarding PPI is The Money Saving Expert who will give you step by step advice on how to reclaim your miss-sold PPI. Go to the The Money Saving Expert Reclaim Page
  • The Money Advice Service is another very good website when it comes to financial matters, advice on debt or reclaiming your PPI. It also has lots of information regarding whether you require PPI at all plus if you should go it alone or employ an agent.

How Have Things Changed Regarding PPI?

Due to the ruling made by The High Court this year banks have put over £6 Billion to one side to settle claims for miss-sold PPI. Consumers at last are getting justice for what can only be described as an abominable injustice. The FSA has warned financial institutions that any attempt to bend new rules regarding the sale of PPI will be investigated and dealt with severely giving the consumer some peace of mind that they will not be “ripped off “again.

There have been many financial controversies in the past such as the pensions scandal and the mortgage endowment debacle that have caused hardship and heart ache for consumers but the FSA reassure us that they will no longer stand by and watch these scandals unfold in the future. New guidelines for the selling of PPI include:

  1. Providing the consumer with comprehensive information regarding the policy
  2. Providing the consumer with a quote
  3. Provide an annual review
  4. Sellers may no longer sell PPI at the same time as the loan. There must be at least a seven day gap.

All these measures should ensure that no-one in future will buy PPI without being fully furnished with the necessary information required to make an informed decision. This should protect consumers from miss-selling, while as the miss-selling of PPI has become the most complained about financial product of all time it cannot come soon enough.