For many years, the banks and other financial institutions greatly enhanced their profits by selling large numbers of payment protection insurance (PPI) policies. PPI was designed to ensure that loan repayments could continue in the event of accident, sickness or unemployment.
However, many policies were sold to people who did not want or need the insurance, and the financial institutions are now counting the cost of their aggressive selling of PPI. The ‘big four’ United Kingdom banking groups have particularly suffered – Lloyds has set aside £3.2 billion for PPI compensation, Barclays £1.3 billion, RBS £1 billion and HSBC £432 million.
The first step in how to claim back PPI is to complain to the company who sold you the policy. Lots of people have used the services of a claims management company when claiming back mis-sold PPI. Where the customer disagrees with the firm’s judgement of the complaint, the matter can be referred to the Financial Ombudsman Service (FOS). If the FOS decides that a firm needs to pay compensation to a customer, its decision is legally binding on the company.
The FOS website indicates that it handled 157,716 PPI cases in the 12 months to March 31 2012. The website also shows that in the six months to December 31 2011, the FOS handled 6,975 cases regarding PPI sold by Barclays Bank, the most of any institution; and 11,585 cases from the various institutions of Lloyds, the highest for any banking group.
Furthermore, a number of financial institutions have been fined by the Financial Services Authority (FSA), the UK’s financial services regulator, for breaching its rules and/or principles when selling PPI. The largest fine was the £7 million penalty handed to building society Alliance & Leicester, while other firms punished by the FSA include Swinton Insurance (£770,000), credit card provider Egg (£721,000) and loan broker Loans.co.uk (£455,000).
Over 20 firms have been fined by the FSA for PPI failings. Often the costs to these firms have been much larger than the amount of the fine, as the FSA ordered many firms to conduct historic reviews of PPI sales and to send a PPI refund letter to customers who may have been mis-sold the insurance.
Familiar failings identified by the FSA included:
-#High pressure selling
-#Automatically including PPI in quoted repayment amounts and relying on the customer to opt out
-#Not adequately explaining that the insurance was optional
-#Not checking whether the customer was eligible to claim on the policy
As the institutions have set aside such large amounts, clearly there is a lot more redress still to be paid. Why not see if some of that could be yours, and investigate how to get a PPI refund?
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PPI Refund 4 Me is a trading name of UKMS Money Solutions Limited regulated by the Ministry of Justice in respect of regulated claims management activities. CRM26720
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