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Archive for tag: PPI in 2018

PPI: What Has Changed and What will 2018 Bring?

Payment protection insurance (PPI) was mis sold to thousands of customers across the UK. But what, if anything, has anything changed?

2018

Advised Sales

Customers are often advised by bank representatives and financial advisers to buy a certain product, including insurances. What happened with PPI was a confusion between what was an actual advised sale based on facts about the customer and a member of staff trying to hit their PPI sales target

What's changed?

If you are sold any product, including PPI, then you must be given a written statement, outlining the reasons why the policy is the right one for you.

Pay out rates

Another issue with PPI that many customers were unaware of was the number of successful claims made against these policies. Car insurance, for example, has a pay-out rate of around 80% but PPI had a pay-out rate of only 15%.

What's changed?

Banks and building societies, if they still offer PPI for sale, must publish their pay out rates on an annual basis and be part of the information that banks give customers so that they can make an informed decision.

Given a choice

Many banks and lenders gave the impression to customers that the purchase of PPI alongside their loan or other product was compulsory and that their own brand of PPI was the only one available for purchase. Just like any other insurance, you have the right to shop around and get a better deal. Most customers, if they had done this, would have found a much better deal from other providers.

What's changed?

Customers are to be informed that they can shop around for PPI insurance, as some other types of insurances may be better for them. Income protection insurances are considered better value than PPI.

Bombarding customers

Many customers buy loans and other products based on emotion. For example, buying a re-mortgage product to expand their home or release capital is an emotional one. PPI, along with many other products were sold to customers at the same time, with many believing that they stood a better chance of gaining the money they needed by buying these products.

What's changed?

Customers are not to be bombarded at the time they buy the loan or mortgage etc. with any additional products being offered to customers some days later, NOT at the time. There must be a gap of 7 to 14 days between the purchase of the main loan and an offer of any other product.

Update: the PPI deadline of August 2019 is now confirmed. The latest legal challenge to it has fallen on deaf judicial ears. NOW is the time to make a claim so start 2018 as you mean to go on: with more money in your pocket!