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The PPI Saga - Has Anything Really Changed?

When the payment protection insurance (PPI) scandal broke, not many people realised how long the saga would last. With the 2019 deadline less than 12 months away, we take a look at what has changed in the wake of the biggest scandal to have hit the British banking industry.

Change

What is PPI?

PPI is an insurance policy that should make repayments on loans and so on, should the premium holder be unable to do so for a variety of reasons. On paper, it sounded a great idea and a side move to protect your finances.

In reality, however, the way the policy was sold to customers meant that people either knowingly - or not as the case may be - bought into policy that was effectively useless to them.

As a result, there are many changes that have been made:

Single policy PPI is banned

Single policy PPI was when the customer paid for the policy upfront and in one lump sum. They were not overly common but there were a significant proportion of customers who had a single policy PPI.

What this meant in practice was that there was a significant lump sum added to the cost of the loan, on top of which the customer would also pay interest. What started as an affordable loan, quickly became a financial millstone around the neck for many people.

When customers did complain or cancel their policy, they were told they were not entitled to a refund of any monies etc. This can longer happen.

7-day breathing space

Many people were sold the PPI at the time they took out a loan or other credit product. It has been recognised that for many people, applying for a loan, credit card and so on is an emotional decision. They invest a lot of emotional energy into needing the loan to be able to purchase something that is of importance to them.

This can make people more susceptible to suggestion and thus when the representative suggested what a great idea it would be to protect your loan etc. people bought into the policy.

Some customers were also made to feel that their application was more likely to be successful and so wholeheartedly bought this additional policy.

Consumer rights

Until the PPI scandal broke, many people may have been under the impression that there was a whole different set of rules when it came to consumer rights and financial products. This is not the case; for example, you do not need to buy any other product from the bank at the time other than your loan or credit card etc.

PPI showed the banking industry that it needed to change in order to gain back the trust and loyalty of its customers. But, it has left many people wondering if banking will ever be the same again.

Inundated by PPI ‘Scam’ Texts?

Not sure if they are genuine messages from people really willing to help? We'll help you work out when a PPI text is a scam by answering straightforward questions.

There are many people who profess to being experienced specialists in the field of PPI compensation. As a result, there are thousands of people who receive weekly, sometimes daily texts relating to their PPI compensation claims.

The problems are many and varied when it comes to these texts; on one hand, financial experts are telling us that the majority of us will be entitled to PPI compensation and should make a by the PPI deadline August 2019. But, on the other hand, these texts can be a nuisance as well as wrong. They are a fishing exercise, a chance to tray and hook custom.

These are the questions you need to ask yourself…

How does a company know how much I am entitled to?

In short, they don't.They hope that by making their text sound convincing and telling you they know exactly how much PPI compensation you are entitled to, you will call and they can reel you in.

  • No one knows if or how much compensation you are entitled to until any PPI that you have on your accounts has been assessed, and the calculation applied.
  • No company can find out for you on your behalf without you giving express permission for this to happen, in the form of written authorisation. Any firm who does this without your consent is effectively stealing your data, a criminal offence under the Data Protection Act.

Is everyone entitled to PPI compensation?

It is true to say that there are many thousands of customers who were duped in buying and paying for an insurance policy that was little use to them. The scale of the mis-selling of PPI is huge. The size of the mis-selling scandal has caught everybody off guard, from the banks themselves through the financial industry regulators.

  • PPI compensation is not automatic. You still need to show you had a PPI policy and that it was mis-sold to you. Many less reputable and experienced companies did, in the early days of PPI compensation, submit a large number of ineligible claims.

But could I be owed money on a policy that I didn't know I had?

Again, some companies are fishing for PPI compensation work BUT, what you must remember is that some customers were 'sold' PPI without them knowing.

In other words, PPPI was an addition to your account after you signed on the dotted line for your loan, credit card etc. so it might be that you have no idea you were mis-sold the product in the first place.

Contact a professional and successful company with an enviable reputation for getting results - call Payment Protection Scotland now!

PPI and Commissions Based Sales

As many customers are now finding out, they were mis-sold Payment Protection Insurance on their loan, mortgage or credit card.

Whist customers make compensation claims to reclaim premiums paid AND interest, there could soon be more compensation coming your way.

Selling commission-based products has been an issue for some people all along, and the ruling in the Plevin case has now been interpreted.

If the commission paid on the sale of PPI was higher than 50% and you were not told, you should be compensated.

How did mis-selling of PPI happening in the first place?

Profits and commission.

As a sales advisor for a bank, an employee would often receive an incentive payment if they sold various products.

This in itself is not a bad idea… if you need the product.

For some people with no savings and possibly employment that may be under threat, taking out a PPI policy or another insurance policy of this kind would be a sensible move.

Did you know...?
It was found that some financial institutions operated a 'first past the post' system in which the first 21 members of sale staff to reach a target would receive a £10,000 bonus

Where it went wrong with the selling of PPI was that advisors received large amounts of commission for selling it, meaning that the banks made staggering profits.

In fact, it has been estimated that at the height of the mis-selling, some banks were making up to 80% of their profits from PPI sales (Source: BBC money)

What measures are being put in place to stop this happening again?

The Financial Conduct Authority is clamping down on commission based sales within the financial industry.

According to one report, bank staff still feels 'under pressure' to sell products. Whilst commission based selling isn't a problem - after all, it acts as a incentive - it can cloud the judgement of an advisor to sell products to people that don't really need it.

Did you know...?
Sales staff at one financial firm could earn as much as £10,00 on top of their earning with commission-based selling of PPI.

If you have a loan, credit card or mortgage that you have taken out in the last 6 years or so, then it would be worth checking your documentation to see if you have PPI.

If you think you were unfairly sold PPI, you should claim PPI compensation.

Why not call out team for a no obligation chat?

Get Your Money Back – Claim PPI Compensation!

Payment protection insurance (PPI) had become the most talked about financial product in the history of modern-day banking.

If you have PPI on loans, credit cards, store cards, car finance, mortgages or any other financial product and think you may be entitled to claim your money back, read on...

PPI - a product with a BIG problem

PPI was designed to protect the repayments on loans or other credit products. A sensible idea and product to buy, you may think.

Should you be unable to work for a variety of reasons, such as redundancy or illness, having an insurance policy that will continue to make repayments on your loan make financial sense. After all, paying regularly and on time protects your credit rating.

But, the issue with PPI as a product was that as insurance, it represented poor value for money.The premiums were high for very little cover.

And, the pay-out rate on claims that were successful was as low at 15%. Compare that to successful claims on car insurance at a pay-out rate of 85% and you can see what the problem is.

PPI also added significant debt to the loan, making the affordability of loans, credit cards etc. difficult. PPI premiums on credit cards added a large amount to the outstanding debt. Premiums were calculated as a percentage of the amount outstanding on the account each month, so the bigger your credit card balance, the bigger the PPI premium.

A problem with selling

The other issue with PPI was the way in which it was sold. The terms and conditions were also limited, offering that few people cover.

Customers with pre-existing medical conditions were not covered and some medical conditions or illnesses were not covered. Mental health issues that may have prevented you from working were not covered and neither were spinal or back problems.

Another mis-selling issue was the way that some banks and lenders simply added PPI to accounts without consent or permission. This happened most frequently with credit cards.

PPI on loans and other similar products is optional but many customers felt compelled to take out PPI, whilst others were told it was a 'condition of sale'. Some customers said that they felt it was hinted they were more likely to be accepted for the loan if they bought the PPI policy.

Claim PPI compensation with Payment Protection Scotland

If you have taken out a loan, credit card, store card, mortgage, the likelihood is you were also sold PPI too.

Payment Protection Scotland is one of Scotland's leading PPI claims management firms and we can help you claim your money back - call us NOW!

A PPI Scotland ‘PPI Quiz’!

Here at Payment Protection Scotland, we like to keep you on your toes when it comes to making claims for mis-sold payment protection insurance (PPI).

With the PPI landscape changing on an almost daily basis, we want to make sure you have all the latest information. But rather than just list facts and figures, we thought we would put it in a quiz format!

Take a look - how many will you get right?

1. PPI is limited to a small number of product - TRUE or FALSE?

PPI is associated with products such as personal loans, secured loan, credit cards, mortgages, store cards, car finance and other products that lent you money when you applied for it. In a sense, this is a TRUE statement as most cases for PPI compensation revolve around loans and credit cards.

2. Every person can claim £2,750 in PPI compensation - TRUE or FALSE?

There is often some confusion around the average figure of compensation which varies between £2,500 and £3,000. This figure was reached by dividing the value of the millions of policies sold, by the number of customers who had bought it. This gives an average PPI compensation figure. This doesn't mean you can claim this amount as each case will vary. Therefore, this statement is false - your claim may be worth a lot less or a lot more.

3. Claims should take no longer than 12 weeks - TRUE or FALSE?

There are all kinds of timeframes, deadlines and limits bandied about that it is easy to become confused. Your bank or lender, on receiving your claim for PPI compensation must reply to you within 8 weeks. This may be to tell you your claim has been successful or it may be to tell you that they are looking at your case. The Financial Ombudsman would like most claims dealt with in 12 weeks but this is not always possible. Therefore, the answer to this is: it varies but if your claim is successful, it should be resolved quickly.

4. If the bank or lender say no, there is nothing more you can do about it - TRUE or FALSE?

False! You can take your claim to the Financial Ombudsman, the body that settles disputes between customers and banks and lenders. They are dealing with thousands of cases and in 7 out of 10 cases, they are finding in favour of the customer.

5. Payment Protection Scotland are a successful claim management company specialising in PPI - TRUE or FALSE?

True! And we can help you. Just pick up the phone and call us for a no obligation chat.

Searching Questions – What is the Problem with PPI?

The PPI saga has been ongoing for some time. Just when you think the flames of the situation have dulled to glowing embers, something comes along and re-ignites the PPI fire.

This leaves many burning questions. Do you know the answers?

The latest issue to have hit the PPI compensation saga is the introduction of a deadline. Set for June 2019, many people, customers and PPI critics alike, have been left wondering why the Financial Conduct Authority (FCA) always so set against a PPI deadline has changed its mind. Have the banks and lenders finally got their own way? Why the change in the FCA stance?

These are good questions and ones that need to be answered. Critics of the deadline point out that as yet, there are 60% of PPI compensation claims yet to be made which suggests that either people don't know they have PPI or they don't know how to claim.

Changes at the top

The FCA came into being after it became apparent that its predecessor, the Financial Services Authority (FSA) was not powerful enough to control the banks. The FSA could only suggest or recommend changes; it had no enforcing powers.

When the FCA came into being a few years ago, its then head was a staunch critic of the banks and their power, as well as their attitude that they can and could do anything they wanted.

Martin Wheatley has a combative approach to the banks and lenders, and was quite clear in what needed to happen.

But, as the PPI compensation saga ran on and on, with the rate of PPI claims being submitted showing no signs of slowing, people started to question when it was going to end.

Martin Wheatley was replaced as the head of the FCA and the mood has been different. Although the FCA say that as a body, they are not bowing to pressure from the banks and lenders, they recognise that the PPI compensation saga is undermining the British banking industry.

But, say critics, this situation was brought on by the banks themselves and not the customer.

What it means for customers

For customers who have yet to make a claim for PPI compensation, the PPI deadline signalled for June 2019 is a clear red flag: make your claim by this time, or miss out on claiming your money back.

The FCA has promised that they will mount a robust consumer campaign so that customers are aware of the deadline, how to claim, what to look for and so on.

There has been a report published recently that suggests although people do know about PPI, they don't think they are entitled to claim - and it is this group of people who need to be reached with the campaign!

Do you have a claim for PPI compensation? Call Payment Protection Scotland today for a no obligation chat.

Why WAS PPI Mis-Sold - And for So Long?

The maelstrom around payment protection insurance and its wholescale mis-selling, doesn't look to be ready to die away any time soon.

In fact, just when you think the whole PPI saga is beginning to fade, it leaps back in to life, bringing with it another twist in the tale.

The latest twist is the introduction of a PPI deadline. Set for June 2019, everyone with PPI must make their claim for compensation by this date otherwise, they will lose out on the possibility of claiming their money back. This means that they could be waving goodbye to thousands of pounds.

Can you afford to take that chance?

But why was PPI mis-sold? And why did it carry on for so long?

#1 It was part of a 'package'

In the 1990s, banks and lenders started to sell products bundled together as packages. Like other retailers, they mounted campaigns that sold the product to customers as a deal financially worth having.

In some cases, this was true but they then started to tag on PPI as part of these packages. Thus, they gave the impression that PPI had to be bought.

The sales representative may also have told you that without PPI, it would be harder to get credit or something similar.

This is unfair selling and it meant that people were sold an insurance product that did not meet their needs.

#2 Customers trusted well-known, well-establish high street banks and lenders

Customers trusted their bank. They had no reason no too. After all, they had been a customer of that bank for decades so why would their bank dupe them into buying something that was not fit for purpose? It was also too preposterous a claim to be uttered out loud…

And this is why the mis-selling of PPI could carry on for so long. No one challenged the banks, because there was no one who really could. But there is now in the shape of the Financial Conduct Authority (FCA).

But, the market had changed and banks needed to make big profits to remain viable in competitive financial markets. And when they saw a chance to make huge profits by selling PPI at inflated prices, they grabbed it.

But the trust and loyalty of their customers was tested. And the consumer fought back.

#3 The way in which it was sold

There are several reasons why PPI was mis-sold. Customers were told they had to buy it or given the impression they had to.

Customers were not given all the information or in many cases, PPI was added to the account without your knowledge or permission.

The time has come to claim your PPI compensation. Call Payment Protection Scotland today!

The PPI Saga – Like a Plot from a Novel!

Everyone loves a good page-turner, a book that when you have finishes reading it, leaves you sad that you will no longer have this wonderful world to sink into.

Many people feel like this about the PPI saga, although not for the same reasons. Banks and lenders can't wait to see the back of the whole embarrassing episode, and the consumer is also apathetic about PPI, the marketing texts, phone calls and emails they have been subject too.

As much as we may deride these PPI adverts on TV, radio and online, they carry an important message:

These adverts are STILL appearing because of all the consumers with a claim for PPI compensation, only 40% have made a claim. So why are the remaining 60% no claiming their cash back?

Consumers not understanding HOW or WHY the PPI mis-selling saga affects them

Payment protection insurance (PPI) was sold to consumers as the product they needed or must-have in order to protect repayments on the loan or credit card.

On the face of it, this sounds like a great idea. However, the problems start when you consider that the insurance product was not suitable for everyone - but was sold nevertheless.

For example, if you had a pre-existing medical condition, this was unlikely to have been covered by the PPI policy butyou were probably not told that.

You were also probably not told that there wereother significant exclusions.Being self-employed was one of them - if the policy did cover you, you were unlikely to have agreed to the policy if you knew the terms and conditions of making a claim.

There were also things likethe level of commission on the sale of a PPI policy not being disclosed, and the fact that the PPI policywas added to your account automatically or without your knowledge.

The point is simple - no one, not even a bank, can foist a product or insurance policy on you without your express consent. They may insist you have an insurance policy to cover repayments in the event you cannot continue to make them, but they cannot force you to buy their own policy over and above anyone else's.

Consumers unsure how to claim

Although we are told time and time again that claiming PPI compensation is simple and relatively straightforward - at this point in time, we have not seen overly complex cases at all - many consumers are still unsure or not confident to deal with what they see as, a mountain of paperwork.

As a claim management company specialising in PPI compensation claims, we can help. We do charge a fee for our professional service which you can find out more about when you call us.

Start your PPI compensation claim with Payment Protection Scotland today.

The PPI Saga – Not Just Hitting the Banks Hard

Payment protection insurance (PPI) is a saga that has been long running. Just when we thought it was drawing to a close or about to sink without trace, something would happen to place it firmly back at the top of the agenda.

With banks announcing yet more money into their compensation funds, the discussion of a PPI deadline of June 2019 has raised yet more interest in PPI.

Whilst banks and lenders are being hit hard, there is also another organisation that is bearing the brunt of the PPI mis-selling scandal - the Financial Ombudsman Service (FOS).

Who are FOS?

FOS in their own words are "the UK's official expert in sorting out problems with banks, insurance, PPI, loans, mortgages, pensions and other money and financial complaints".

This means that if you think a bank has treated you unfairly or mis-sold you a financial product, then FOS can help you out. You will first need to have tried to sort it out with the bank. Some customers still feel that the bank has treated them poorly or that they feel a product was mis-sold to them.

FOS deal with all kinds of financial products sold by UK banks and lenders. They produce annual reports, as well as various statements throughout the year.

Of all the financial products they deal with, they tell us that PPI is the most complained about financial product of all time.

Eye-watering figures

FOS recently released a statement that said they were dealing with or accepting 4,000 PPI complaintseach month.

Don't forget that as FOS deal with PPI complaints, they are also dealing with other complaints regarding other financial products. Apparently, the second most-complained about financial product is packaged current accounts.

PPI complaints represents 188,712 cases that they dealt with during the financial year 2015 - 2016. This represents more than half of its work load!

FOS has had to increase its workforce considerably, taking on some people specifically for dealing with PPI complaints.

More complex

FOS are also telling us that the PPI cases that people are bringing to the are more complex. This means they are spending more time and resources looking into people's complaints but are still finding in the case of the consumer more often than not.

Does your case need FOS?

FOS will only take referrals if you have tried to claim PPI compensation from your bank and the bank has refused your claim. You need to be clear about why you think you are owed PPI compensation and this is something that PPI Scotland can help you with.

It may be that you don't need the extra impact that FOS will bring to your case, especially if you tell your bank clearly why you are entitled to your money back. Call us to find out more!

 

What Would you Spend Your PPI Windfall on?

It is hard to remember a time when there was not a PPI scandal rumbling on and on. When the mis-selling scandal broke in to the public domain all those years ago, banks were hoping it would be a flash in the pan, a problem that would fizzle out overnight.

But the consumer was far savvier than this and realising that they could claim all of their money back, they went ahead and did so. To date, around 12 million people have claimed PPI compensation since 2011. But what have they spent it on?

Survey

Surprisingly, there has been very little research to find out how people have spent - or invested - their PPI compensation windfall.

Having said that, there were signs in the economy of people having money in their pockets as various indicators, such as growth Domestic Product (GDP) has a small and unexpected upswing. Changes of 0.2% in terms of GDP is a big change, especially with the 2008 recession still being felt.

True to form, people are spending their PPI compensation with a survey by Voucher Codes Pro in 2014 finding that it took only two and a half weeks for a PPI windfall to be spent.

There was a small minority - 12% - who saved or invested their PPI compensation whilst the majority of people spent it. But what on?

What's on your shopping list?

The survey recorded some great responses from people and the list of the top four PPI purchases were:

I. Holiday - when the purse strings are tight, often the first things to go are the expensive foreign holidays. People either choose to go budget or stay at home. But those who enjoyed a PPI windfall rushed out and booked themselves a great holiday. Is this something you would enjoy?

II. New or improved car - it is the thing that every busy household relies on but again, when money is tight, changing and upgrading the car to a newer model falls a little further down the list. However, those consumers who enjoyed a decent PPI windfall rushed out and bought themselves a new or newer, more economic car. How much would this benefit you?

III. Household appliances - freezer keep packing up? Washing machine not as good as it was? Household appliances get worn out but if you had some spare cash in your pocket, wouldn't a new fridge/freezer and so on be on your shopping list?

IV. Paying the bills - when money is in short supply, getting behind with the bills happens incredibly quickly. This is stressful and unpleasant but many people took advantage of their PPI windfall to catch up with bills.

You could do some or all of the above but only if you lodge a complaint about mis-sold PPI. Do you have PPI? Was is mis-sold?