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Archive for tag: Finan

Financial Ombudsman Still Inundated with PPI Claims

Could yours be next?

The payment protection insurance (PPI) scandal has left British banks and lenders footing a £37 billion compensation bill. And this amount is set to escalate according to the Financial Ombudsman Service (FOS) who revealed that they are still being inundated with cases claiming PPI compensation from disgruntled customers.

The first half the year saw FOS deal with over 91,000 PPI complaints, a shortfall of only a thousand on the figure for the same time in 2015.

It had been a long held belief that there would be a dramatic drop in PPI compensation claims through FOS but this has proved to be wrong. PPI complaints peaked some years ago but they have been receiving 3,000 complaints a week for the last six years.

FOS also say that the issues and uncertainties around PPI still remain a challenge for all involved, including themselves.

Deadline

The banks have long been lobbying for a PPI compensation deadline, a date by which time anyone intending on claiming their money back must do so. Initially reluctant, the Financial Conduct Authority (FCA), The City regulator, has decided that this is possibly the best course of action to jolt customers out of apathy.

That said, the FCA has stunned the banks and lenders by suggesting a deadline of June 2019, a date that is over 2 and a half years away, a larger slice of time that the banks had hoped for. They were keen on a sooner date, possibly the spring on 2018.

Increase in provisions

This later date of June 2019 will no doubt mean that banks and lenders will have to put aside yet more cash into their PPI compensation funds, something that will continue to hit their profits.

But who did customers complain about most when it came to PPI compensation claims? The figures released by FOS show that the majority of complaints they dealt with relating to PPI in the first half of 2016 related to Lloyds and its subsidiary, Bank of Scotland. The combined group saw 33,984 PPI complained, compared to 9,371 PPI regarding Barclays, 6,975 at HSBC and 2,756 at Nationwide.

The uphold rate has changed slightly, from 7 in 10 claims being upheld, to 6 in 10 complaints being found in favour of the customer.

Is your case one of them?

Before you submit a complaint about PPI to FOS, you first need to approach the lender or bank that you believed mis-sold PPI to you.

If you are unsure how to do this, why not call Payment Protection Scotland now?

Your PPI Complaint and the Financial Ombudsman Service (FOS)

In most circumstances, people who make their claim direct to their bank of lender for payment protection insurance (PPI) compensation are successful.

However, in other cases, their bank or lender disputes they have a claim and refuse to payout. This is not the end for your PPI compensation claim if this does happen to you; you can ask FOS to take a look at your claim and ask them to make the final decision as to whether you are entitled to PPI compensation, or not.

Why is it taking so long for the PPI mis-selling scandal to blow over?

It is estimated that around £50billion worth of PPI policies were mis-sold over a 10 to 15 year period by hundreds of different financial firms. Millions of customers have already complained and have successful claimed compensation. The sheer vastness of the scale of the mis-selling problem is the reason why the PPI scandal is taking so long to resolve.

The steps to making a claim for PPI compensation…

Step 1: check that you have PPI

PPI may have been sold to you alongside a whole range of different accounts, from credit cards to loans. Check carefully and, if you spot a policy then you may be entitled to compensation IF the policy was mis-sold to you.

Step 2: ask you bank or lender for a refund

You can do this directly or you can engage a professional company such as PPI Scotland to do it for you. You will need to tell the bank or lender why you think you are entitled to a refund; in other words, you must prove you were mis-sold the policy.

Your bank or lender should respond within 8 weeks.

Step 3: If they say yes…

Check that the amount being offered to you is the right amount; a company such as PPI Scotland can check this for you but in a nutshell, the amount should mean that you are put back to the financial position you would have been in, if you had not been paying PPI.

If you think the amount is wrong, you can ask the bank to reconsider. But, if they maintain their stance, you can also follow step 4, asking FOS to check the amount being offered is correct.

Step 4: If they say no…

Then you still have 'course of redress'; this means that you can ask FOS to look at your case and, after weighing up all the evidence, they will make the final decision as to whether you are eligible for PPI compensation. They will tell the financial company or bank to reimburse you.

How long does it take?

Unfortunately, FOS is inundated with complaints regarding PPI and so they are dealing with cases in chronological order which means they are dealing with cases in order that they arrived. In some cases, it is taking 12 months for cases to be resolved BUT, the vast majority of cases are resolved in the customers' favour!

Has Anything Really Changed When it Comes to Selling Financial Products to Customers?

The mass and whole scale mis-selling of payment protection insurance (PPI) to customers has thrown up a whole new debate about how banks and lenders sell to customers. Routine 'sales' were questioned and now, changes are being implemented to safe guard the customer…

Emotional decisions vs. rational decisions

Purchases of all kinds are an emotional decision; customers did not see themselves, in many cases, as 'buying' loans, credit cards, mortgages etc. but that it exactly what was happening. Customers were buying a product and it was an emotional decision…

Banks and lenders, like all other businesses, know this and so they took advantage of the situation, offering various additional products that would enhance the customers experience; with financial products for example, they would often ask how would you cover repayments if you were no longer working etc.?

They would then offer you a 'magic' product that for a few extra pence a month, would make sure that you would not end up in financial problems if you did lose your job. You were hooked and you bought the product…

Advised sales - setting out the reasons why

And so, the lines between suggesting a product and an advised sale were blurred. If you take out a loan with a bank, you do not need to take on any other additional product.

It may be a good idea; it may be a wise and prudent move if you know your job is looking a little shaky in the future etc. It would seem a responsible thing to do BUT, you still do not have to buy the banks' own product.

Like car insurance, you CAN shop around and get the right deal for your current circumstances.

If, however, the bank insist that as part of the package that their own product is the one you must have, then they must clearly tell you why - and not just verbally; they must set this out in writing and clearly show the reasons why, as part of this package, their policy is not the best, butthe right one for you at this time.

Breathing space

Consumer law is clear; you have 14 days from signing the agreement to change your mind. With loans, and in particular, PPI this was not made clear. Customers also thought that this law did not apply to financial products, but it does…

But now, the Financial Conduct Authority, along with various consumer groups have worked with ban to introduce a breathing space within which products in addition to the main product -t he loan or mortgage, for example - cannot be offered.

Customers are to be given time and space to consider the man product before they are offered any other products; they are to be given ALL the information to make an informed decision. And they are not be badgered or hoodwinked.

Practices have changed BUT, if you think you have a claim for PPI compensation act now by calling Payment Protection Scotland.

Financial Ombudsman Service Sees PPI Complaints Soar

What is PPI?

On paper, the product doesn't seem too bad - payment protection insurance makes the repayments on your debts (loans, credit cards etc.) if you are unable to do so due to unemployment, illness etc.

BUT...

... the terms and conditions of the policy meant that many people were not covered and in the majority of cases, cover finished short of the term of the loan etc. For example, if you made a claim on it in the last few months of your loan, you would find that you were not covered.

Driven by high profits and large commissions, customers were sold a policy they would be unable to claim on but in many cases, the PPI policy was added to the customer's account without their agreement or knowledge.

Customers - like YOU - were paying over the odds for a product that was effectively useless.

After much arguing, the banks were told they would have to pay back this money to customers. And this is where the problem started.

At first, banks made 'offers' far below the actual amount that they should have been paying back. Customers were advised on this via claims management companies such as PPI Scotland, along with consumer groups and the media. Customers, as a result, refused these 'offers'.

But then customers were kept waiting too long for their case to be resolved and, customers were also told NO.

But, with the internet and consumer organisations to help, people are savvier now and demanded that the money which had been taken from them was to be repaid - in full!

The Financial Ombudsman Service (FOS) is the independent body that works with both the financial sector and the consumer, resolving issues with financial products and services. They are the body that is now inundated with PPI complaints - in fact by July 2013 complaints about PPI had jumped by 179%.

Overall, FOS is finding that consumers are complaining more about many financial products and not just PPI, as a result of being so fed up of malpractice by banks and lenders.

You may be surprised to find you have PPI on your accounts. Payment Protection Scotland is an expert and professional company, specialising in helping customers claim back their PPI premiums. Why not give us a call today?

The Financial Ombudsman Service and the PPI Scandal

Check out the - The Financial Ombudsman Service and the PPI Scandal - blog on the Payment Protection Scotland website.