25/11/2009 by Bradders.

As we enter the next decade the inevitable is starting to happen as the rush to make a ppi complaint to get compensation gathers pace. The halcyon days of easy credit that made loan and mortgage brokers big profits is a distant memory but the associated products like payment protection insurance that was sold alongside the loan has come back to haunt them. PPI was the overpriced insurance that many brokers bolted on to their credit agreements to cover the borrower for loan repayments in the event of accident sickness or unemployment.

Unfortunately for the consumer in a lot of instances it was something they didn’t want, didn’t need and in a lot of instances didn’t ask for, Even if they did ask for it in a lot of instances they could never claim for it due to the small print and exclusions in the policy. There has been such an outcry over the last year the FSA has decided to re-open nearly 200,000 ppi complaints that were turned down for dubious reasons. However, due to the fact that the finance markets are not as profitable as they once were and there is a potential compensation tsunami around the corner there is growing concern that many of the smaller firms are planning ways to shirk their responsibilities.

The Financial Services Authority has warned that its crackdown on firms that missell payment protection insurance may lead to an increase in phoenix firms. This is the cynical practice of closing an existing firm down to emerge very soon after as basically the same company with a different name. Leslie Titcomb director of small firms at the FSA told delegates at the recent Mortgage Business Expo that the regulator has its eye on several firms in regards to this.

She believes the problem has been exasperated by the  prospect of companies having to reassess past ppi complaints they have rejected. This will almost certainly make the prospect of companies considering the
Phoenix route a lot higher as a way of ridding themselves of these ppi complaints and compensation.

Brad Martin of Claimline
UK said “We are now noticing that a lot of our claims are now starting to build up with the Financial Services Compensation Scheme. This is due largely to a number of well known brokers going to the wall and the responsibility being passed to the FSCS. It’s very frustrating that just when a case is coming to closure via the FOS the whole ball game changes and the ppi complaints then get passed to another body and the whole process starts again”Brad recommends that anyone who has used a broker for a sub prime mortgage and feels they have a ppi complaint should act sooner rather than later

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24/11/2009 by Bradders.

With the continuing farce of missold PPI a new problem is beginning to emerge in this already tawdry saga. Just as it would seem the already overstretched consumer is getting somewhere with regards to recompense a new ploy is beginning to emerge to shirk responsibility for past crimes.

The Financial Services Authority has warned that its crackdown on firms that missell payment protection insurance may lead to an increase in phoenix firms. This is the cynical practice of closing an existing firm down to emerge very soon after as basically the same company with a different name. Leslie Titcomb director of small firms at the FSA  told delegates at the recent Mortgage Business Expo that the regulator has its eye on several firms in regards to this. She believes the problem has been exasperated by the recent consultation paper on the prospect of companies having to reassess past ppi complaints they have rejected.

This will almost certainly make the prospect of companies considering the
Phoenix route a lot higher as a way of ridding themselves of these ppi complaints and compensation.Although the FSA is alive to this threat and will take strong action if deemed necessary there are critics who say the situation is already occurring.

Brad Martin of claims management company Claimline UK said the early signs of this are already in place “We are already aware of this happening amongst brokers and we are already dealing with some of the problems that these companies leave behind in the aftermath. I find it hard to believe that there are not stricter penalties in place to at least protect the public from this outrageous practice. One of our clients was sold £25,000 of PPI on a loan of £100k by a broker who shall remain nameless but didn’t like to say no. The case was brought to us over a year ago after a firm of solicitors ditched it 3 months after taking the case because they felt it was only a 50/50. After many months of deliberation the Ombudsman service found in our favour only for the firm to go to appeal.

After a further three months the Ombudsman overturned the appeal awarding our client compensation but then the broker decided to go into administration. The case is now with the Financial Services Compensation Scheme and likely to drag for many more months whilst the scheme ascertains if the company have got the assets to pay. However the really cynical part about this is the fact that a new company has appeared out of the ashes to offer yet more loans to my already overstretched client.  We’ve since discovered that the same people have launched a claims management company to help people with ppi complaints!              

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21/11/2009 by Bradders.

The Financial Institutions that have benefited hugely from providing customers with payment protection insurance are urging the Financial Services Authority to drop plans to force them to reopen some 185,000 previously rejected ppi complaints.The financial watchdog said in September that too many ppi complaints dismissed by providers were later overturned by the Financial Ombudsman’s Service (FOS) in favour of the consumer. The FSA said it planned to introduce new rules requiring providers to reopen tens of thousands of rejected complaints made previously.

 These rejected ppi complaints will be reassessed against new guidance based on ‘fair assessment’ and ‘payment of redress’.However, many credit providers believe the regulator is rushing through its proposals and would be wrong to apply a new rule retrospectively.The Finance Leasing Association does not feel that applying new rules to past ppi complaints is the best way forward and feel the FSA should give more time to get the procedure correct.

The British Bankers’ Association (BBA), whose members sell and are involved in the majority of PPI complaints, has told the regulator that its plans contain “serious flaws”.The BBA thinks the regulator should reconsider its approach and feels the time frames that it’s proposing are too short and the proposals sit outside its consultation paper Payment protection insurance is the controversial product that is sold alongside loans and other credit agreements including mortgages and store cards.Data from the FSA indicates that in 2008, providers received about 158,000 PPI complaints, of which they upheld about 40 per cent.

Of all PPI complaints, only about 16 per cent were referred to the FOS of which about 80 per cent were upheld in favour of the consumer.The FSA estimates that a redress package could cost providers between £57m – £115m with an added administrative cost for the industry of £37m to reassess each rejected complaint.The FSA’s proposals are in addition to an agreement it secured in September for providers representing 40 per cent of in-store sales of unsecured single premium PPI to review their sales book and identify consumers who had been mis-sold. 

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21/11/2009 by Bradders.

Perhaps the heady days of being able to get a loan, mortgage or credit card without too much of a problem is a distant memory.However, the aftermath of this borrowing frenzy is now starting to rear it’s head as people are waking up to the fact that it came at a price. I’m not talking about the obvious such as associated interest attached to the loan but the much more devious practice of adding payment protection insurance to the credit agreement. The amount of people who were coerced, bamboozled pressurised into taking this insurance at the time of the credit agreement is staggering.

Even more staggering is the fact that there are thousands of people walking around with payment protection insurance who don’t even know they have it. The banks and financial institutions did a real number on their clients to swell their already huge profit margins.

As the cold wind of recession now starts to blow more and more people are waking up to the fact that they have been missold and need to make a ppi complaint to get their premiums back. For every one person who realises they have a case for a ppi complaint there’s probably another six that are blissfully unaware that they have cause for a complaint due to any number of reasons.

To set the record straight, anyone who has it without realising it, was pressured into taking it, cannot claim on it due to the exclusions in the policy DOES have cause for a ppi complaint. 

Brad Martin of Claimline UK a regulated claims management company suggests anyone who has a credit agreement within the last six years should dig out their credit agreement and look to see if there is some kind of insurance attached. 

 “If you do discover you have it, cast your mind back to the time of the sale said Brad, and ask yourself the question did I buy this or was it sold to me? There is no problem in buying something that was sold to you as long as it was a requirement and you would be able to use it” 

“Some of the worst cases for ppi complaints are people who were sold this with pre-existing medical conditions such as back ache and mental problems which can never be claimed on. There was also a recent case of a woman who was in her 70’s when she was sold the policy, way beyond retirement age and obviously with a whole list of pre-existing medical conditions!”    

So…have you got a ppi complaint? 

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18/11/2009 by Bradders.

As we near the end of 2009 it has become apparent that due to the increased media interest and the various consumer forums ppi misselling has become a contentious issue. The financial institutions for their part have dug in and are prepared for a long fight to protect their bottom line figures. It would seem that everyone with a ppi complaint knows at least another person who is in a similar boat.

They also share a common problem, that the lender they have made the ppi complaint to refutes any wrongdoing in the sales process. 

It would seem that it doesn’t matter if the borrower was self employed, unemployed or of retirement age the same stock answers are rolled out when a ppi complaint is put forward. The financial institutions are in denial when it comes to the misselling of this insurance and for a very good reason, profit!  

The consumer has been contributing billions of pounds of profit to these institutions over the years by buying this overpriced insurance whether they wanted it or not.However, with the growing tide of discontent ppi complaints are now rising at an alarming rate and the financial ombudsman service has seen ppi complaints rise threefold of late and is now nudging 1000 complaints a week. To the banks this would seem an annoyance especially when they state that the insurance might not cover you for all aspects of the policy but it still offers some level of cover. This is similar to buying half an umbrella, your back might be wet but at least your fronts dry. 

There are various estimates of how big this misselling scandal is but which? estimates it at around 2 million policies. This is a crippling amount of compensation to the institutions if they have to pay it so they are working on the process of inertia. This means that at least 85% of ppi complaints are refuted and they work on the premise that the complainant will give up the fight.

The situation has got so bad that the FSA has asked for 185,000 cases to be re-opened due to the sharp practice that some banks have employed.In addition the FOS has been so frustrated by the antics of some banks regarding the ppi complaints procedure that they published a name and shame list. 

Unfortunately these institutions (some of which the taxpayer owns) are battle hardened veterans and the war of attrition together with ppi complaints will continue into 2010.   

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