14/12/2010 by admin.

There are thousands of articles written about Payment Protection Insurance (PPI), many by myself, but it got me thinking about the real injustice of being missold PPI and those trying to make PPI claims.  Having referred to guidelines issued by the Financial Ombudsman, it seems all financial products should be sold in a “fair and reasonable manner” and “suitable for the needs of the client”. A wonderful sweeping statement but in the UK who really has the authority to monitor what is fair and what is suitable in the financial sector? The FOS are now drowning in complaints about rejected claims from banks whereby the policy holder is clearly either not in need of a PPI policy, or could not claim on it even if they wanted to. Recent research by the regulator has shown some banks are rejecting claims without even considering them ! Take for example the lady who took out a loan with her local bank to support her granddaughters wedding. The loan itself wasn’t the issue although one has to question the morals of a bank that puts someone in so much financial debt at their time of life. But more the point is the greed of the salesperson who sells a 5 year PPI policy to a retired lady with a long medical history of arthritis and hypertension. She was also unlikely to be made redundant as she was retired already. so what was the point of the PPI policy? Quite obviously the salesperson made no attempt to question the poor lady over this and therefore the policy was sold alongside the loan “as is”. The insurance company would undoubtedly fight like hell to pay out given her previous medical history.  Then there was the gentleman who was a deep sea diver for one of the major UK oil rigs, one of the most dangerous jobs in the World. He was sold a PPI policy in case he was sick and unable to work. Again, what are the chances an insurer would happily pay out should he be off work sick which is quite likely? Both claims were rejected by the selling bank who reported that both customers were told about PPI, and were given policy documents at the time. I’m sure they were, but what about what was “suitable” for the customer?   So who monitors these rules and how often are they vetted? Well this is now the issue that is causing such a consumer backlash. The FOS is apparently receiving some 500 new PPI claims each week about missold PPI. This just goes to show the extent of the misselling scandal that has been going on for years. 

According to the regulator there are some £2.7bn worth of PPI claims to be had over the next 5 years, a real boost for the claims market. And since 2010 there are new rules governing PPI at the point of sale. But isn’t that making us smile after the horse has bolted? Wouldn’t it have been better to make regular checks on the banks and find out who they were selling PPI to and why for the last 10 years? I’m gong to repeat what has been written before. PPI is not a bad thing. Some people do need it and some banks do sell it in a fair and reasonable manner. But its about time the regulators got to grip with what is essentially an easy product to sell and easy to monitor. Stop the injustice and stop the industry from getting a bad name.

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02/12/2010 by admin.

Over the last 5 years the misselling of Payment Protection Insurance (PPI) has become a thorn in the side of both the consumer, banks and the industry regulator.  

With over 2 million PPI policies in existence and PPI claims at an all time high, it’s no wonder the banks are unwilling to open the floodgates to consumer complaints. Instead they have found another reason to stop processing complaints full stop ! 

Since the regulator proposed all previously rejected PPI claims should be revisited (some 200,000) , the British Banking Association (BBA) has now requested a Judicial Review to investigate the validity of this regulation, and given its members the ideal opening to put all other valid claims on hold. 

Is this fair to the consumer? Absolutely not. What will be crucial is to see how the regulator will handle the impending Judicial Review on PPI claims to be held sometime in January 2011. It’s no secret the Financial Services Authority (FSA) has been reported as being somewhat toothless in the past. This alongside the new coalition Governments hint that it may reduce the powers of the FSA and put them back with the Bank of England makes the Judicial Review all the more interesting. 

Will the FSA use this as a showdown as Margaret Thatcher did with the unions and go out in a blaze of glory, or will it roll-over one more time and let the banks dictate their own consumer complaint policies? 

Only time will tell, but in the meantime don’t expect too much positive news from your banks PPI complaints department.  

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01/12/2010 by admin.

You may have heard about the impending Judicial Review? The British Banking Association  (BBS) is taking the regulator to court over changes to complaints procedures that should be taking place from today 1st December 2010. The BBA has reported that some of its members are putting all ppi claims on holding pending the result of the review. Having contacted the Financial Ombudsman Service (FSA) and heard their view that there is no validity in imposing this stoppage, we can report that we at Claimline

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