Perseverance Pays Off Claiming Mis sold PPI

I recently wrote an article about what has been the biggest claim regarding mis sold ppi. As I stated at the time there has been various figures banded around the industry with the highest that I have ever heard of at £50,000. Whilst I have never been one to discount something out of hand for the sake of it I must admit that this figure does seem incredibly high. A more realistic figure I would suggest would be closer to £35,000 but I guess it will be something no one will ever truly know for sure. 

I was discussing this very subject with a colleague last week and happened to mention that I have been working on a case with over £25,000 of mis sold ppi attached. This is by far the biggest claim that I have ever worked on so far. The claim in question has dragged on for nearly 18months and the client had engaged the services of a law firm before we were handed the case. When I first reviewed the case I was a little unsure of its prospects especially after the law firm had sought the services of a barrister to rate its chances of success. However on closer inspection certain things became apparent and I felt it was worth ours and the client’s time in pursuing this complaint.  

Firstly, the legal team had exhausted all of the legal cover that the client had at his disposal which amounted to a few thousand pounds. This meant the case was now on a purely no win no fee agreement which meant this case had to succeed to make it worth their while. Secondly and perhaps more importantly the law works to a completely different set of guidelines to the Financial Ombudsman Service. It would appear that once your signature is on any legally binding document the set of scales weighs very heavily in favour of the person holding that parchment. Mitigating circumstances and evidence although taken into consideration would not seem enough to combat the power of the signed agreement. 

With this is mind we took the case and set off on a journey with more twists and turns than a rollercoaster. We approached the firm which was a broker based in
Wales and put the complaint forward. The response was an 8 page draft that they had obviously used before with the legal team. I asked the client for all the documentation the law firm had provided him with and it was getting on for the size of a telephone directory. After a little bed time reading a pictured emerged of a client who had been duped many times prior by different lenders.  

This was for a £100,000 loan but he had recently been diagnosed with an illness that was potentially life threatening. To this end he requested some form of insurance that might cover this loan in the event of his death so his wife would not be left in an untenable financial position. The salesman for his part (although not totally guilt free) asked the underwriters in Dublin for their view. The opinion came back that although the cover offered would not cover him for this aspect it would for other areas so it was ok to sell.  

It was at this point that I figured it was not at the very least morally right for a man to be sold insurance that would not cover him for the reason he requested. However, even if it did cover him it would only run for five years of a twenty year loan and he was paying £25,000 for the privilege! 

Further correspondence went to the policy seller until finally after 8 weeks we took the complaint to the Financial Ombudsman Service. It then transpired that the client had engaged them before he went to the law firm and the case file was now firmly shut.Generally,the FOS cannot get involved if the complaint goes to court so we were fortunate that it never got to that stage.  

After numerous conversations pleading the client’s case the FOS agreed to re-look at the case but I knew at this point I had to speak to the client and explain the situation. The client had a tendency to react to any situation without realising the full implications as was apparent with the ppi cover that started this whole thing rolling. I explained to him that it was nearly a year since he made the initial approach to the firm, then contacted the FOS and engaged the services of a law firm.  

I told him that if I was going to have any chance of winning this case he would need to let me get on with it without being ‘hands on’ himself as this would only confuse the issue. He agreed to this and he said he would only contact me for updates. After many months and countless phone calls from the client we got the decision we were looking for and the adjudicator found in our favour. If only life was that simple, the firm appealed and it needed to go to an Ombudsman for the final decision.  

After six months and by now hours of telephone conversations with the client once again we got the positive news that we had been waiting for. This was a final decision and there could be no more appeals, the client would be awarded all the premiums paid, plus interest and a further £100 for all the stress and inconvenience the client had to endure. Unfortunately, this was not the end of the story as the firm had one final bombshell to drop, the firm went into administration so all bets were off. 

 The mis sold ppi complaint spent a further couple of months in a holding bay before being handed to the Financial Services Compensation Scheme. This is a scheme that has basically been set up by the major financial institutions to offer compensation to people caught out by this situation.  

I knew the scheme paid out up to £50,000 so I knew that this particular case was covered. However, what I wasn’t aware of is this scheme works 100% independently from the FOS so as far as the case was concerned we practically had to start from scratch.  

This involved mountains of paperwork to be completed and the case re-presented. Several times in the handover from the FOS the case went off the radar as they have completely different case references which cannot be cross referenced. They also use a third party, Deloittes (the accountants) to make sure the firm is found to be in default. This involves months of painstaking forensic analysis to make sure there is absolutely no money available in the firms coffers to pay the claimant. 

Finally, after eighteen months of trials and tribulations we got the result we were waiting for, an irrevocable yes. The payout was 90% of the premiums paid as these are the guidelines that the FSCS work to and are completely separate from any decision by the FOS. So an award of just under £25,000 was made to the client who was understandably very pleased. He did have one further question though, which I didn’t think would be a problem after the hundreds that I had answered over the last eighteen months. 

 “What about the £100 for stress and inconvenience”? came the response ! 

This entry was posted on 08/07/2010 at 04:24 pm and is filed under PPI. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.