Reclaim Mis Sold PPI|Payment Protection Insurance|PPI Misselling claims media comments

We have agreed with Barclays, Lloyds and RBS to extend the time they have for dealing with payment protection insurance (PPI) complaints and, therefore, ensure that they are handled properly.

Here we explain what it means for your complaint.

Which complaints does it affect?

If you had a complaint put on hold by these firms during the PPI court case you will now get a decision by 31 August 2011.

They have also been given an extension of 16 weeks until 1 September 2011 to handle new complaints received after the court case. After this date, the firms then have 12 weeks to handle new complaints until the end of the year.

By January 2012, however, we expect all PPI complaints handling to return to the normal eight-week limit. The firms with the temporary time extension will have to keep complainants and their customers fully informed.

All other PPI complaints are unaffected.

Why is this happening?
A number of firms decided to put some or all PPI complaints on hold when the British Bankers’ Association launched a legal challenge to our new PPI complaints handling measures.
We want to see all PPI claims for compensation dealt with swiftly and appropriately. However some firms are facing a huge backlog of existing complaints as well as a surge of new claims on PPI since the court case.
Therefore, this temporary extension has been agreed so that the firms can process these complaints properly and fairly.

Last updated: 13 June 2011 FSA

The High Court heard a judicial review brought principally by the British Bankers' Association (BBA) against the recently updated rules of the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS).

The judges rejected the BBA's arguments that the rules were unfair because they were retrospective.

BBA seeks Judicial Review of FOS new rules

New rules implemented on 1st December by the FOS are now being looked into by the courts

Payment Protection Insurance.

PPI Misselling Claims Media Comments

"PPI complaints have risen ten-fold in the past two years, and are now about 25% of all the complaints we get"

Egg: Fined £721,000 in Dec 2008 for serious failings in its credit card PPI sales by telephone between Jan 05 and Dec 07.

Alliance and Leicester (A&L): Fined £7 million, the highest fine to date by far, in Oct 2008 for serious failings in its PPI telephone sales between Jan 05 and Dec 07.

5 motor retailers: GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited were fined a total of more than £175,000 in Aug 2008 for exposing a total of 2,175 customers to the risk of being sold unsuitable PPI policies.

Liverpool Victoria: Fined £840,000 in July 2008 for serious failings in the sale of single premium PPI on telephone loans sold betweeen 14 January 2005 and 8 August 2007.

Land of Leather Ltd: Fined £210,000 in May 2008 for allowing its sales force to sell PPI, between May 2006 and Feb 2007, without effective monitoring or training.

HFC Bank, also trading as "Household Bank" and "Beneficial Finance": Fined £1,085,000 in January 2008 for putting customers at an unacceptable risk of being sold PPI when it was not suitable for them. Failings took place in branches between Jan 2005 and May 2007.

Capital One: Fined £175,000 in February 2007 for failing to ensure that 50,000 customers buying credit cards and loans between January 2005 and April 2006 received important information about the policy.

GE Capital Bank Ltd: (supplies cards for Asda, Comet, Debenhams and Topshop among others): Fined £610,000 in January 2007 for inappropriate sales of its store cards and credit cards.

Redcats: Fined £270,000 in December 2006 for also not having adequate systems and controls in place to minimise the risk of unsuitable sales.

Regency Mortgage Corporation: Fined £56,000 in December 2006 for not collecting sufficient information during a PPI sale to ensure its recommendations met customers' demands and needs.

Loans.co.uk: Fined £455,000 in October 2006 for not having appropriate systems and controls to minimise the risk of unsuitable sales.

IMPORTANT READING

YOU MAY HAVE BEEN THROWING YOUR MONEY AWAY ON PAYMENT PROTECTION INSURANCE ON LOANS, MORTGAGES & CREDIT CARDS

Payment Protection insurance is sold alongside loans and credit cards to cover repayments if the policyholder is unable to work because of sickness, accidents or redundancy.

In October 2006 the Financial Service Authority judged that there were serious failings in the way PPI was sold. Their report paves the way for the millions of consumers to reclaim the premiums from the firms that sold them these worthless policies. These companies have already been judged and fined heavily for their mis deeds by the Financial Services Authority.

READ BELOW THE REPORT SENT TO THE FSA BY THE CITIZENS ADVICE BUREAU AND SEE HOW MUCH YOU COULD HAVE BEEN RIPPED OFFiiss

Main findings OF THE CITIZENS ADVICE BUREAU ON ppI MIS SALES

1. The price that people have to pay for cover

PPI does not come cheap. As the table shows, PPI premiums paid by Citizens Advice Bureau clients represent anything from 13 %to a staggering 56 %of the amount loaned. It is common for PPI on loan agreements to be paid for by a one off premium included in the loan itself and for interest to be charged on PPI premiums.

PPI premiums as proportion of loan: cases reported by bureau

Loan Type	Loan amount	PPI pREmium	PREmium as a percentage of total loan
Unsecured personal loan	£8,993	£2,217	25%
Unsecured personal loan	£11,000	£5,133	47%
Hire purchase for car	£5,059	£2,157	43%
Hire purchase for car	£6,895	£2,317	34%
Unsecured loan	£5,600	£744	13%
Secured loan	£25,000	£12,127	49%
Secured loan	£35,000	£10,150	29%
Conditional sale for car	£4,300	£2,394	56%
Unsecured personal loan	£13,000	£3,367	26%

Credit card PPI payments are generally added to the monthly balance, but this is not necessarily any cheaper in the long term. On some policies the cost of PPI premiums would increase the cost of borrowing by about nine per cent per year.

Despite their cost, many PPI policies do not actually guarantee to pay off debts. For example, some insurers will only cover payments for no more than a year, and only cover the minimum payment in some cases.

Lenders are squeezing extra loan business out of borrowers who are paying over the odds to protect themselves and the creditor if their circumstances change. Two different estimates suggest that PPI premiums are about three times the cost of providing cover. This implies that borrowers could be over charged by as much as £3 billion per year for PPI cover.

2. The design of payment protection insurance policies

Many PPI products contain clauses designed to exclude people from cover. CITIZENS ADVICE BUREAU clients have found that claims arising from bad backs and mental health problems are completely excluded from policies sold by some high street lenders. People who are self employed or who are employed in fixed term contracts also face exclusion from cover.

3. How PPI products are sold

CITIZENS ADVICE BUREAU evidence shows that borrowers are often sold policies that are completely inappropriate. High pressure selling or unfair practices such as inertia selling can force people to take out insurance that they cannot afford, do not want or need. These practices are widespread throughout the credit industry.

Bad practice in the sale of PPI products is also linked to irresponsible lending. Citizens Advice Bureau often report that people in financial difficulties are offered consolidation loans that they clearly will not be able to pay. In some cases these loans are rolled over with a new PPI policy sold each time.

4. How PPI claims are administered

CITIZENS ADVICE BUREAU clients find that the administration of PPI claims is often bureaucratic, insensitive to their financial difficulties and sometimes even responsible for increased indebtedness. This has resulted in lenders adding administration charges to borrower's debts and threatening court action.

Some borrowers cannot successfully claim on their PPI policy due to unreasonable requirements to provide medical evidence. For other CITIZENS ADVICE BUREAU clients the costs of obtaining medical evidence represent a considerable barrier to claiming.

Claim now for your money back if you were mis-sold

MORE THAN £10 BILLION WORTH OF POLICIES HAVE BEEN MIS-SOLD AND AS MANY AS 30 MILLION POLICY HOLDERS MAY HAVE A CLAIM.

COMPANIES FINED BY THE FSA FOR MIS-SELLING

Company	Amount fined	Date of fine
Capital One	£175,000	Feb 2007
Loans.co.uk	£455,000	Oct 2006
Regency Mortgage Corporation	£56,000	Sept 2006

Firms that sold PPI are not contacting the people who they sold their policies too. Make a Claim!

Reclaim Mis sold PPI

FSA grants temporary extension for some PPI complaints