Archive for Credit Card Insurance

Payment Protection Insurance Claims cost Lloyds Bank £3.2 Billion

On of the major players in the Credit Crunch which had to be bailed out by the UK taxpayer and contributed to the current deficit  – Lloyds Banking Group – has announced today that it has set aside a £3.2bn provision for claims from clients that they were mis-sold payment protection insurance (PPI), which accounts for the bulk of the £3.7 billion loss it has reported.

Lloyds Bank  has decided to settle all the PPI misselling claims after UK banks lost a High court judicial review called by Barclays and others over PPI  claims compensation last month.

Payment protection insurance also known as ASU, Income Protection Insurance and Mortgage Protection Insurance,  was sold by the large banking corporations at inflated rates to cover in particular credit cards, personal loans and mortgage repayments  if income ceases or falls because of accident sickness or unemployment.

Since 2009 thousands of Uk complainants have received compensation because their policies were mis-sold. Missold, because they were sold policies that were either not explained to them, did not cover them because of certain exclusions or in the majority of cases was only taken out for fear of not obtaining the loan.

The Financial Services Authority (FSA) published guidelines last year which said banks should contact all PPI past policyholders to ask them to complain if they believed they had been mis-sold PPI.

Insurance Blog is pleased that the UK Government owned bank is leading the way on payment protection insurance compensation claims. The other banks will now have to follow suit.

It is only fitting that the big banks who were the main offenders in the misselling of PPI should be made to pay and not the hard pressed insurance industry, and particularly the Insurance Brokers, that has so far footed most of the bill with ridiculously high FSA fees, which in many cases has created barriers to entry for the UK Financial Services market.

On a footnote if the Bank of England keeps Interest Rates at the same level today, it will be a good day for the UK Public.


Insurance Brokers Pay for UK Banks PPI Claims

It’s that time of year again when UK Insurance Brokers and Intermediaries are asked to pay their annual membership fees for the soon to be defunct, Financial Services Authority (The FSA).

Reading through the Insurance news this week you will find multiple stories from Brokers moaning about the ‘ridiculously’ high fees they are being asked for in order to trade. In some cases the fees have risen three fold on last years costs and many small operators are threatened with going out of business. In some cases the fees represent 20% of their income.

The reason, the FSA’s Financial Services Compensation Scheme to which all members have to contribute.

In the last couple of years the FSCS has paid out over a billion pounds in damages for claims to individuals who were mis-sold payment protection insurances (PPI), such as mortgage protection or loan protection primarily by – The Banks.

Yes those good old bastions of the British financial system, the Banks and not forgetting the Building Societies who were equally as guilty, had been systematically robbing their customers for years, who took out PPI on the back of their mortgages, loans and credit cards .

On average these institutions were charging in excess of five times the premium for the same cover that could be had from an independent supplier or Insurance Broker offering mortgage protection.

They got away with it for years because you and me the UK public were initially only too keen to sign their agreements to secure the loan!

When they finally got found out, thanks to the lobbying of Insurance Brokers, The FSA fined them all a pittance!

Now there’s a shortfall in the amount of cash needed to foot the bill, and guess who’s got to pay?

You got it – the very same Insurance Brokers who pointed out the misdeeds of the UK Banks and PPI  in the first place.

How mad is that!

So what do the FSA do and what does the Insurance Broker get for his fees?

Well from our experience absolutely nothing, until today that is, when a letter came in the post advising us to ‘cold shoulder’ this investment company we’ve never heard of on penalty of being struck off the register……

Meanwhile the UK Government owned Lloyds TSB Group owners of Halifax and Bank of Scotland have announced today that they finally will not be pressurising their customers into buying their PPI products!

Insurance Blog is of the opinion that the sooner the FSA is removed and replaced by another bunch of bureaucratic pen pushers the better and worse for us all………..

This time please keep the Bankers out of Insurance!

Payment Protection Insurance Claims and Premiums Rocket

The recent tide of misselling of Payment Protection Insurance in the UK , in particular the outlawed single premium PPI cover, is ripping back to catch those offending banks and lenders through the UK courts.

If you have been ‘sold’ either Mortgage Payment Protection Insurance, Loan Payment Protection Insurance or credit card insurance during the last four years, you more than likely have the opportunity to claim all of your premiums back!

Before you go running to many of the no-win no-fee PPI claims lawyers that are springing up everywhere, your first port of call should be to complain to the offending bank, lender or finance company that mis-sold you the protection. If you do not get any from them then you should immediately contact the Financial Ombudsman

The number of PPI mis-sold policy complaints being upheld against financial services companies has soared during the past year, according to the Financial Ombudsman Service Annual report, which deals with public complaints about Insurance.

The number of complaints about payment protection insurance misselling tripled to 31,066 during the last year, this followed a five-fold increase in complaints during the previous year.
The number of PPI complaints upheld by the Ombudsman was an astonishing 89 per cent proving that the policies were widely missold.

The Ombudsman blamed the situation on the economic downturn, saying some firms were not investigating claims properly before they were referred to the service because they were watching their bottom line.
It added that survey evidence suggested that many consumers were being put off pursuing complaints against companies because of the unhelpful attitude of the firms involved.

If you believe you have been mis-sold a PPI policy you should write to the company involved.
You should tell them that you do not believe that the PPI you bought was sold in your best interests.
you should tell them that unless they can prove that the policy was fair and reasonable and that yuo were treated fairly when sold the insurance – that you demand a full refund of all premiums, and subsequent interest on these payments, that you have paid in relation to this policy.
You should also inform them that you also expect 8% interest to be added to each payment you have made – as this is the statutory amount a UK court would pay.

Around half of the complaints against PPI misselling related to six of the UK’s largest financial institutions! PPI is still a good product for Accident Sickness and Unemployment protection, however it is wise and much cheaper to purchase this type of cover on a monthly basis from one of the leadinbg Uk independent PPI providers.

Some examples of these are:

Burgesses – the UK’s leading PPI suppliers
Personal Accident – Compare mortgage protection and Income protection insurance rates and plans
iProtect – offering free switch facilities at great rates
British Insurance – various PPI online offerings at competitive rates

Credit Cards – time to bring the Banks to order!

The Bank of England steering committee are meeting today to discuss Interest Rates and are likely to drop the base rate by at least half a percent to 1.5%. This will be the lowest UK rate for over 350 years. Will it make a difference? Well certainly to those of us who have interest only mortgage repayments or large commercial borrowings, but only if these banks (source of all the current problems) pass this rate cut onto the us customers. If they don’t then the Government have simply increased the banks profits by .5 percent!

Which brings me to Credit Cards. Credit cards are the lifeblood of the Internet and the majority of transactions could not be achieved without them. They are the most used form of transaction and are essential to the free flow of the modern money supply.
So why are the pariah banks allowed to charge extortionate rates for this this form of essential credit? These anti-social institutions are charging you and me anything between 12% to 30% for the privilege. These Interest Rates are outrageous and it’s high time the Government cracked down on these thieves and brought them to bear to explain their ‘criminal’ loan shark rates!

It is essential that credit card rates are brought in line with all the other forms of borrowing if the Government is serious about pump priming the economy.
Write or email your member of parliament today to express your views about these outrageous and economy damaging rates.
The credit card debt in the UK is massive and needs to be addressed immediately if we are to stand any chance as a nation of dragging ourselves out of debt and recession.

If you are lucky enough to be still employed and have a large monthly credit card debt, think about how you are going to pay these extortionate bills should the worst happen and you lose your JOB. Personal Accident provides a range of income protection and lifestyle protection insurance products which will cover your credit card debt for 12 or 24 months should you become unemployed.
Visit Personal Accident for some future peace of mind and don’t forget – Write to your MP complaining about the loan shark credit card companies!

AXA Warns over 3.7 million people are struggling with credit debt

A quarter of the population is facing financial meltdown with many of the effects of the credit crunch to blame, according to new research from AXA
According to AXA over 3.7 million people who are struggling to control their finances are failing to cope with mounting credit card bills and 1.02 million people have borrowed too much money and can’t keep up with mortgage repayments.

And AXA warns that some are facing worse problems with over three quarters of a million people saying they have been forced to apply for an Individual Voluntary Arrangement and around half a million threatened with the bailiffs, or worse, repossession.

Some 6.1 million people have no savings left at all and around 1.7 million people say their investments have all but disintegrated thanks to the credit crunch. According to AXA, in all some 11.6 million people (25 per cent of the adult population) are said to be struggling financially with a significant number – around 1.3 million people – admitting their finances are entirely out of control.

The statistics have been published to coincide with the launch of AXA’s My Budget Day website, which provides consumers with a series of online tools designed to help them take control of their finances in just one hour each month.