Here at PPi-Refunds we would like to know if you think you been mis-sold a payment protection insurance (PPI) scheme? Just fill in the form on the Right Hand Side of this page and we will will look into it for you.
PPI Refunds can report that the Financial Servive’s Authority and the Financial Onbudsman’s Service are having to go to court, as the High Street banks challenge their PPI ruling that came into force in December 2011.
The UK Press Association reported on the 23rd January 2011 that the banks intend to challenge the payment protection insurance ruling. As you are aware PPI was sold alongside loans, mortgages or credit cards to cover both the fiancial institutions and the customer should the holder find themselves unable to work due to an accident or illness or if they lost their job.
The major high street banks are now challenging the Financial Services Authority (FSA) this week in the High Court over the FSA’s new rules on the way complaints about controversial payment protection insurance must be handled. The British Bankers’ Association is launching a judicial review against the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) over new regulations that came into force in December 2011.
The reason behind this challenge is that the new FSA rules that came in in December 2010 aim to ensure consumers are treated reasonably, both during the purchase of payment protection insurance (PPI) and after their purchase when they place a complaint against the financial institution that they then believe mis-sold them the cover. The FSA & FOS put down these new rules to ensure fair play when a person bought into a PPI. They wanted to ensure that the person understood what they are buying, that providers inform potential customers about the key features of a policy, rather than just provide them with a document giving the information, as was previously the case. The financial institutions will also have to provide proof to show that it was made clear to the customer that the cover was optional if it was taken out alongside credit.
However the banks are unhappy that the rules apply not only to new PPI policies but to PPI policies that were sold prior to the new regime being brought in. The BBA said: “We believe the FSA is effectively creating a precedent which permits it to apply new rules to previous sales – even where those sales were regulated by other FSA rules.” The BBA said the policy was like having a road with a speed limit of 30mph, which was later changed to 20mph, and deciding to hand out speeding tickets to people who drove at 30mph before the limit was reduced.
We here at PPI-Refunds understand the reason behind the BBA’s challenge – but it does not get them off the hook in our opinion regarding all the mis sold PPI’s that the financial institutions made over the last 6 years, when pressurised selling techniques were in place to get a PPI sale. The reason behind this was two fold, firstly a lot of their employees were incentivised to sell PPI’s with their loans, mortgages and credit cards and secondly that PPI’s where another huge area of profit to the banks. An example of a mis sold PPI was when pensioners were sold PPI’s even though it didn’t cover them should they make a claim! Also consumers were being informed that they had to take out a PPI alongside their loans, mortgages or credit cards which was just not true.
PPI cover is the most complained about product to the Financial Ombudsman Service, with latest figures showing that PPI complaints accounted for over 2,500 complaints during just one week of January 2011. It is also worth noting that the FOS is finding in favour of consumers in 86% of PPI cases.
PPI Refund Compensation was challenged by the banks
The High Court judgement last year affected millions of bank customers. The reason being that the Financial Services Authority (FSA) and the Financial Ombudsman’s Service (FSO) were being challenged in the High Court over compensation for the mis selling of payment protection insurance (PPI) by the British Bankers’ Association (BBA).
The BBA that represents the UK’s banks said that the new FSA rules are “wrong in law” because they are retrospective. They require the financial institutions to review their past sales, which could lead to compensation worth nearly £3.0bn being paid to over 2.5 million people.
The judicial review starts in the High Court on Tuesday 25th January 2011. “The FSA was trying to impose new standards on past sales,” said a spokesman for the British Bankers’ Association (BBA).
This was rejected by the FSA, whose spokesman said: “These principles had been in place for a very long time and are nothing new.”
PPI polices are supposed to repay people’s loans, mortgages and credit cards if their income drops as a result of them falling ill or loseing their job.
The banking industry has been accused of mis-selling them on a huge scale, generating many millions of pounds in profits by selling insurance that people were unaware they were paying for, or on which they could not claim, or which they did not need.
In August 2010, the FSA laid down new rules for the banking industry, which came into force in December 2010.
Part of their requirements meant banks would have to review past PPI sales, even where customers had so far not complained, potentially landing the banking industry with a huge bill.
Customers would have to be repaid their PPI premiums, plus interest, if the bank or other firm concluded that the customer would not have bought the policy in the first place.
And if the customer paid with a single payment up-front, but would have bought a regular premium policy instead had it been offered, the customer would have to be put back in the position they would have been in.
The BBA says the past sale of PPI polices will have to be judged by the new rules, based on the FSA’s general principles, rather than on the specific rules that applied at the time.
It argues that a breach of the FSA’s general principles does not in fact give customers any legal right to compensation with a specific complaint.
“We believe the FSA is effectively creating a precedent which permits it to apply new rules to previous sales – even where those sales were regulated by other FSA rules,” the BBA said.
“Therefore, this ruling might not only affect customers who have bought PPI, but might also set a precedent that could affect all products regulated by the FSA.”
The BBA is also using identical arguments to challenge the way the Financial Ombudsman Service (FOS) deals with PPI complaints that come from disgruntled bank customers.
Of course the sceptical amongst you may just put this down to the BBA stalling for time as a side effect of this challenge is that thousands of fresh complaints have been put on hold since last October when the BBA first announced it would launch its legal action.
In December 2011, the FOS, which is receiving about 2,500 fresh PPI complaints each week, revealed that it was struggling to deal with a growing backlog of complaints because some banks were simply refusing to engage with them.
This strategy has angered the FSA which, last Friday, issued a warning to the main banking industry trade associations, including the Council of Mortgage Lenders (CML) and the Building Societies Association (BSA).
It told them their members had no excuse to avoid dealing with each complaint individually within the standard eight weeks.
“We will take tough action against any firm which cannot demonstrate it is delivering fair outcomes for consumers, including because the firm is inappropriately relying on [part of the FSA's complaints rules] to defer consideration of those PPI complaints that could and should be progressed during the judicial review,” said Christina Sinclair of the FSA.
“Such action may include referral for further investigation and enforcement action where appropriate,” she warned.
After numerous official enquiries and widespread complaints from consumer organisations, the financial authorities have concluded that several million bank customers were mis-sold PPI policies during the past decade.
The Competition Commission is in the process of stopping banks from selling PPI polices at the point where they agree to grant a loan or issue a credit card.
The High Court hearing is expected to last until Friday 28th January 2011.
Here at 121 Claims Management we charge a very competitive PPI refund fee of just 15% + vat, which is why we were very disappointed to read about some other claims management companies have been highlighted in the press as ripping off their customers.
The report was in the Mirror online and written by Nick Sommerlad and it went into detail about some of the scandalous practices that other claims management companies are adopting. Like iSmart Consumer Solutions whose TV advert says “We’re here to help you get your money back. We do the claim on your behalf so you don’t have to worry about a thing.”
But that was not the case for one furious customer called Michael from Abergavenny in Gwent, whom the Mirror spoke to who was awarded £2,365 compensation and not only did iSmart keep every penny, it demanded he pay them £890. The reason for this being that the claim was based on iSmart 30% commission being not just on the money that there customer had already paid out on their PPI policy, but also on the premiums that they would have paid in the future as well. Unbelievable !!!
The article goes on to say that the claims industry insiders tell us that companies pay up to £200 recruiting every client – from Google sponsored links, television advertising and fees to lead – generating companies. That’s £200 that needs to be made back from every claim – no wonder fees are so high.
We’ve found a string of firms charging a third or more of every successful claim:
* uclaim4me.co.uk 36%
* ppiclaimback.co.uk 36%
* theclaimsguys.co.uk 36%
* haywardmarsh.co.uk 35%
* wefightanyclaim.com 35%
* premierfinancial.org.uk 33%
Here at 121 Claims Management we charge a very competitive 15% +VAT fee – and work on a No Win No Fee basis with no upfront costs.
Due to the high cost of PPI Refunds two high street banks have announced that they may look into their clawback rules concerning executive bonuses.
Both RBS & Barclays banks have recently announced a review of their executive bonuses as a result of the huge bill they face from PPI refund claims as they are considering reclaiming some of the costs of the PPI refunds from executive bonuses.
It all began with Lloyds TSB and now Barclays and RBS have confirmed that they are also looking into the legality of enforcing highly paid bankers to repay the executive bonus awards received for selling Payment Protection Insurance. The reason behind this is because much of the PPI’s sold were taken out by their customers as a result of mis-selling due to forceful and misleading selling tactics.
Lloyds TSB announced at its AGM this week that the board were looking into the possibility of forcing high-ranking bank executives to take some of the blame for this PPI scandal, and return their bonuses in order to partially cover the price of PPI refund claims.
The chairman of Lloyds TSB, Win Bischoff said that “The implications on compensation are being considered by the remuneration committee and will be determined by the board in due course, in line with the FSA code on compensation.”
This statement by Lloyds TSB opened the way for Barclays and the Royal Bank of Scotland to investigate going down a similar tack themselves, as they unveiled plans to review directors’ bonuses and establish how much of it was based on profit from mis-sold PPI’s – and whether they might be able to use clawback rules to have that portion of the money returned.
There is no surprise about these statements, that the banks are now looking to claim back these executive awards – with Lloyds TSB having set aside £3.2 billion to cover the number of PPI refund claims they expect to receive in the coming months and years, while Barclays and Royal Bank of Scotland between them are looking at footing a bill of almost £2 billion.
THis all has come about as earlier this month (May 2011) the high stret banks capitulated in their legal battle with the the Financial Services Authority, who had introduced new rules on PPI mis-selling which required banks to look over the policies they had sold in the past and apply these new regulations retrospectively. When a high court ruling went against them, the banks initially planned to appeal, but eventually gave up and are now obligated to work to refund customers.
Which is where ppi-refunds comes in as we have already handled 1,000′s of PPI claims and have claimed back £1,000′s of pounds for our clients. To start your PPI refund claim just fill in the form on the right hand side of this web page and you could be on your way claiming back thousands of pounds with the average PPI ref
UK banks lose Payment Protection Insurance (PPI Refunds ) challenge.
From the hallways of justice came a crushing blow to UK banks, for as of the 20th April 2011 the banks lost a judicial review that could have a major impact on whether more Payment Protection Insurance compensation claims had to be paid out on loans, mortgages and credit cards. As you are probably aware Payment Protection Insurance or PPI was sold to people, so as to repay a persons loan, mortgage or credit card if their income droped or ceased altogether because they had fallen ill or had lost their jobs.
This judicial ruling will open the way to more PPI refunds and this will probably force the banks to look back at their past sales of Payment Protection Insurance (PPI) to see what their exposure to PPI claims actually is. Some estimates have said this judicial review ruling could leave the way open to a £4.5bn bill for the banks.
Not surprisingly the British Bankers Association (BBA), said it was “disappointed” by the ruling, and now has till the 10th May 2011 in which to lodge an appeal. The BBA also added that banks would continue to put some fresh PPI claim cases on hold until it had decided whether to continue its challenge in the courts.
It is our view that the judgement by the judicial review panel was ‘clear-cut’ regarding PPI Refunds.
We at 121 Claims Management have already submitted thousands of people’s PPI refund claims for mis-sold PPI’s to the financial institutions and our clients have already received considerable amounts of PPI compensation payments.
The banks originally challenged the Financial Services Authority (FSA) & the Finacial Ombudsman Service (FOS) over guidelines the FSA published last year.
As part of the judicial review that was heard in January of this year, the court was told that the implementation of the new guidelines by the FSA would cost the banks and other financial institutions as much as £4.5bn, paid to millions of people. As their customers would have to be repaid not only their PPI premiums but any interest this money could have earned them, if it was concluded that the customer would not have bought the policy in the first place had they been fully aware of the policy’s details.
A similar reimbursement could be due to those customers that paid for their PPI policy in full up-front.
The present facts about PPI refunds are already staggering with over 200,000 cases having been referred to the Financial Ombudsman Service (FOS) in the last few years; this figure includes over 100,000 cases that have been referred in the past twelve months. Presently the FOS is dealing with around 5,000 cases each week and this figure is set to rise in light of the outcome of this judicial review, with around three in four complaints being upheld.
The Financial Ombudsman Service said there should no longer be any stalling over fresh cases involving PPI refunds.
There are 2 types of Payment Protection Insurance.
There are two basic types of Payment Protection Insurance, the first is Monthly Paid Premium and is when you apply a monthly PPI premium and this type of PPI is mainly associated with Credit Cards. The second type is called a Single Premium Policy and it is where a PPI lump sum is paid to the insurance company at the onset of the loan, but then the finance company adds the cost onto your loan and you then end up paying not only the loan, the interest on the loan, the PPI but also the interest on the PPI as well. For further details read on ……………
1) Monthly paid premium (as used by most of the credit card companies)
These policies should not be a big problem to cancel; normally they will cancel this type of policy if you write to them or Phone them. Of course if you consider that you have been mis sold this type of policy you can of course try and reclaim all the premiums that have been made, plus claim the interest on each payment at the Contractual Interest Rate.
2) Single Premium Policy (these are the biggest rip off ones) These policies are paid for in full to the insurance company at the start of the policy. Most loan
Companies will finance the full cost of the policy by adding the cost onto your loan. What they do not tell you is that you will also be paying interest on that amount at the loan interest rate for the full term of the loan.
Example 1. PPI Cost £3300 Interest Rate 7.9%APR Interest payable over the 5 year loan = £1300 Actual cost of PPI cover £ 4600.00
Example 2 PPI Cost £3300 Interest Rate 7.9%APR Interest payable over the 15 year loan = £3913.00 Actual Cost of 5yr PPI Cover £ 7213.00
As some loans have variable APR the costs used in the above examples could be in fact a lot higher.
This example came from the Consumer Action Groups website which you can goto by clicking here ……
Should service men & women demand a PPI Refund?
Men and women serving in her majestys services are starting to ask the question “Do I need PPI?”
PPI or Payment protection insurance to give it its full name is designed to cover your monthly repayments on loans, mortgages and other credit agreements, including credit cards.
Banks and other financial institutions have a duty of care towards their customers to ensure that they know why PPI is being added to their monthly payments.
However this has not been the case, banks in particular have been mis selling millions of PPI policies every year. It is only now that their customers are questioning, ‘Why do I need PPI?’
The short answer to the question “I am in the armed services so do I need PPI?” is NO, you do not need it.
The majority of government funded jobs, are covered if you become injured or sick. Which means that for those people PPI is a wasted policy, however banks and other financial institutions do not care about this.
They have sales targets to meet and as a result of this they neglect their responsibilities as a financial institution, which are to ensure all their customers are fully aware about what they are being sold.
Therefore if you are in the Army, Navy or Air Force you do not need PPI as you are covered in the event of sickness or injury.
If this may apply to you then just fill in the form on the right hand side of this page and we will call you back at a time to suite yourself to see if you have been mis sold your PPI and are therefore due a PPI refund.
Below is a list of the ten most complained about financial institutions who are being faced with large PPI refunds.
This list is surprising in that it doesn’t contain the names of the obvious insurance companies but is in fact made up of the big banks, headed up by Lloyds TSB Bank plc.
The FSO (Financial Services Ombudsman) has between January to June of 2010 received over 37,000 complaints which was a 23% increase in people coming forward who were unhappy with their insurance.
is indebted to a Catherine Burns and her research that she did for BBC Radio 1′s Newsbeat program. In it she lists the top 10 financial companies and the amounts of insurance complaints they have received and what percentage of these complaints were upheld by the FSO.
First = With 8,474 insurance complaints of which 86% of these complaints were upheld is Lloyds TSB Bank
Second = With 2,205 insurance complaints of which 95% of these complaints were upheld is Barclays Bank
Third = With 1,876 insurance complaints of which 96% of these complaints were upheld is Black Horse Ltd
Fourth = With 1,608 insurance complaints of which 93% of these complaints were upheld is Welcome Financial Services
Fifth = With 1,548 insurance complaints of which 43% of these complaints were upheld is Bank of Scotland
Sixth = With 1,499 insurance complaints of which 70% of these complaints were upheld is Royal Bank of Scotland
Seventh = With 1,344 insurance complaints of which 72% of these complaints were upheld is HSBC Bank plc
Eighth = With 1,302 insurance complaints of which 89% of these complaints were upheld is Clydesdale Bank
Ninth = With 1,027 insurance complaints of which 72% of these complaints were upheld is Nat West Bank plc
Tenth = With 977 insurance complaints of which 58% of these complaints were upheld is Santander UK plc
The vast majority of these complaints as you can see above have been upheld by the FSO and were due to the mis selling of PPI’s or Payment Protection Insurance when people have taken out a loan or credit card. The idea behind PPI’s is simple enough in that should you lose your job or are too sick to work, then the PPI will cover your payments. However PPI Refunds would like to voice its concern about the cost and useability of the PPI’s that were sold by the banks, in that they are either too expensive or they don’t provide you with good enough cover.
PPI Refunds though does have some good advice which is when it comes to PPI’s, then the age old adage is still true in that it is best to shop around, if you believe you need payment protection insurance.
PPI Refunds has researched what the likely cost of mis-sold PPI’s will be on the financial sector and has found out that it is the well know high street banks in the UK, such as Barclays, HSBC and Lloyds Banking Group who are now facing up to the reality of having to pay out hundreds of millions of pounds in PPI refunds, as PPI compensation claims against them mount, this is according to research by Morgan Stanley, a US investment bank in a report in October 2010.
PPI Refunds has found out that it is Lloyds TSB who is thought to be the bank most exposed to PPI compensation claims with a potential liability of upto £1.5bn.
It is estimated that the worst case scenario for PPI refunds bill across the whole of the UK banking sector could be as much as £5.0bn spread out over the next 5 years, This is £2.1bn greater than the top estimate of the Financial Services Authority (FSA), who predicted in August 2010 a total cost to the industry of between £1bn to £3bn. The FSA has already brought 24 separate actions against firms for mis-selling of PPI’s and the fines levied by the FSA have exceeded £22m.
PPI Refunds has concluded that the average PPI payout figure is:
Average payouts to successful claimants are around £2,000, though some estimates put the figure at closer to £2,500 per claim.
In the worst case scenario UK banks could end up paying £2.5bn to customers wrongly sold PPI, with the rest of the cost made up by fines and administration charges.
An example of this is Lloyds TSB who faces a minimum bill of £220m, rising to as much as £1.53bn if the proportion of customers making claims were to reach 30pc of the total sold PPI and if the success rate for claims hit 50pc.
The recent publicity around the issue of PPI mis-selling is one factor that could contribute to a higher bill for banks caught up in the scandal, with approximately 12m policies still outstanding and roughly 20pc of customers likely to bring claims for compensation. That is where PPI Claims Made Simple comes in by giving you the chance to reclaim your money from the financial sector.