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.