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 thatunless 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 swtich facilities at great rates British Insurance - various PPI online offerings at competitive rates Understanding PPI
Understanding Payment Protection Insurance Cover in the UK
On Monday, Building Societies and Banks will no longer be allowed to sell payment protection insurance at the point of sale. They will also be banned from selling lump sum upfront single premium policies. This article explains the principles of PPI and how best to purchase it given the recent legislation and changes in the UK economy.
If you have ever bought a new car or a large flat screen television the chances are you paid for it with some type of finance plan, credit card or credit facility, or loan. Apart from being offered a breakdown warranty, in the past you may well have been offered an insurance plan to cover the repayments of the credit should something terrible befall you. This is the basis of payment protection insurance or PPI as it is commonly known.
What does PPI cover? Payment protection is widely available these days to cover all forms of credit or borrowing. Loan protection products are sold that either individually or collectively cover credit cards, bank loans, car finance and all other monthly payments and outgoings. Until recently you may well have been offered this type of cover when you took out the loan or credit card; however this was made illegal in 2009 after a long enquiry by the Competition Committee looking into the restrictive practices of the major high street banks and lenders. Consequently payment insurance premiums and plans have become a lot cheaper now that independent suppliers have entered the market. If you own a house under a mortgage you can purchase what is known as Mortgage Payment Protection Insurance or MPPI. This type of plan though often cheaper, will only cover the monthly mortgage payments. Other protection insurance products are available, the most common being those that cover your salary or income often known as Income Payment Protection Insurance or lifestyle cover. With these types of products you are not limited to agreed repayments and can spend the income benefits as you would your salary or wages.
What does PPI cover you against? All payment protection products cover you against and will pay a monthly sum to protect your payments, in the event of you suffering from one or a combination of accident, sickness or unemployment. It is possible to buy these as standalone covers, although accident cover is more often than not sold alongside sickness cover. Unemployment Insurance cover, which protects you against sudden redundancy or unemployment is often sold by itself but because of the nature of the risk, commands a much higher premium.
How long does protection insurance cover you for? The length of time of the cover is dependent upon how long someone wants the benefits to be payable for in the event of a claim. This varies by insurance company and is often only for twelve months although some of the better more flexible providers offer cover for up to 24 months, at a premium. It should be noted that this type of insurance is viewed by the providing companies as an invaluable short term solution to life's difficulties and not the correct type of cover for long term illness or disability, for example.
Purchasing payment protection cover With so many offerings in the market it is a worthwhile exercise to shop around for cover. Most independent suppliers have online applications that literally only take a few seconds to complete. You normally have to supply you age, and how much benefit you would like each month. When buying you will need to decide how long you wish to wait after you become sick or unemployed, before you start to receive the monthly benefits. This is known as an excess period and you will normally be offered periods of 30, 60 or even 90 days. Obviously the longer you wait the cheaper the monthly premiums will be! Look out for companies offering back to day one cover which will pay you back to day one of your claim once the excess period has passed. When comparing payment protection insurance plans it is necessary to find one that will cover all of your monthly outgoings. Many providers have different limits and it is important that you find one that will not leave you with a shortfall for repayments! As with purchasing all types of insurance, but particularly with payment protection cover, it is very important that you check that you are you eligible for cover and not excluded under the policy conditions, which are often more rigorous than for other types of cover.
When comparing payment protection plans for Mortgage Payment Protection Insurance and Income Protection Insurance it is sensible to visit a large respectable, independent supplier such as PPI Insurer of the Year Burgesses.com for advice and quotes. Burgesses offer a vast array of information and online quotes backed up by a useful helpline of experts.
12800 UK homes repossesed in the first quarter of 2009
Despite the UK government saying they eould help keep people in their homes there were over 12000 repossessions in the UK in first quarter of 2009.
There were 12,800 repossessions through the courts by first-charge on the property mortgage lenders and banks, in the first quarter of this year, according to the Council of Mortgage Lenders (CML).
This compares with 10,400 in the fourth quarter of last year, and 8,500 in the first quarter of 2008. Insuranceblogger is disgusted that the people who created the credit crunch crisis for those poor repossessed are so quick to resort to the courts!
Although repossessions are still rising, the CML now thinks its earlier 75,000 repossessions forecast looks pessimistic for the year as a whole, and expects to revise the figure downwards in its next housing market forecast update later this summer.
The number of mortgages in arrears continued to rise both months in arrears and as a percentage of the total outstanding mortgage value.
The number of existing mortgages has declined from around 11.7 million to around 11.1 million.
According to a suit from the CML - "The key message continues to be: talk to your lender as soon as you identify difficulties emerging, and take advice from an independent money adviser if you have other debt issues as well as your mortgage. Lenders do not want to repossess if a realistic alternative solution can be found."
Hmm - have a look at this, especially if you are being threatened by debt collectors
Courts, bailiffs, debt collectors and repossesions can be avoided with mortgage protection insurance which will keep a roof over your head even if you lose your job!. Act now before its too late!
It's nearly a week since the law was changed to stop the sale of piggy back protection products on top of loans and mortgages. Anyone taking out a new loan or mortgage (is there anyone out there?) now has fourteen days before the lending company is allowed to contact them to sell PPI products.
This cooling off period was introduced a after Competition Commission report recommendation, to stop the misselling of protection products to desperate customers who would often accept these one off payment charges as they didn't want to jeopardise the borrowing.
So with less than a week to go before phones start ringing in all those lucky houses who have managed to secure borrowing, InsuranceBlogger advises anyone to call bar those numbers and shop around on the Internet for much better deals on loan payment protection insurance and mortgage payment protection insurance.
There are many independent companies out there offering better protection cover for far cheaper premiums. They will also offer you products that will be more suitable to the risks of accident unemployment and sickness (ASU) which can cover your whole lifestyle rather than just a small portion of it should the worst happen. One Such company is Personal Accident who offer a range of independent quality PPI and lifestyle insurance products.
Yep it's true - Dolphin Riding Accident Insurance! - if you visit Personal Accident they can offer you sports accident insurance and sports travel insurance for such activities as Dolphin Riding and Swimming with Dolphins. They also have a range of travel insurance products and protection products for just about every sports activity and contingency that you might encounter er! swimming with dolphins.....
Anyway here's the 'loan shark' loan payment protection insurance commercial!!
Following the £7 million fines imposed on Alliance and Leicester recently for the misselling of loan payment protection insurance polices, Simon Burgess of British Insurance explains why Banks have been ripping off their customers and overcharging sometimes as much as 1000% on prices which could be obtained through an independent supplier
FSA says shop around for Loan Payment Protection Insurance
Due to the thousands of complaints it received from the public about the mis-selling of PPI (Payment Protection Insurance), the Financial Services Authority (FSA) has for three years been investigating the way that PPI is sold. Last Year the FSA announced that it would undertake a further and far more extensive investigation into the PPI selling methods, particularly to test whether:
1. When borrowing money, customers are told that PPI is optional. 2. Customers are given clear information about the PPI product and its cost. 3. Customers are given the assistance they need by the Lenders to be clear about what they are eligible for under the policy and what the exclusions are that will affect a claim. 4. When advice is given to a customer the advice should only recommended a policy that meets their individual needs. This includes sales material where PPI products and services marketed and sold in the UK are designed to meet the needs of the consumer. 5. All customers should be offered a fair refund if they cancel their policy. Customers do not face unreasonable post-sale barriers imposed by firms to change product or switch to an independent PPI provider, submit a claim or make a complaint about the policy.
This year the FSA both outwardly and as part of a commissioned mystery shopper exercise visited 150 sellers of Loan Payment Protection Insurance, the PPI product that had received the most number of complaints, who sell LPPI alongside their unsecured personal loan offerings.
The FSA investigation found that: 1. There have been improvements in two of the outcomes above, namely in making it clear that PPI is optional and providing refunds on virtually all single-premium policies, but little or no improvement in the remaining three, including the disclosure of price and policy details as well as firms’ consideration of eligibility and suitability.
2. Around two thirds of firms visited and nearly all of the firms mystery shopped failed to meet the ICOB requirements.
3.Around 30 percent of firms visited and less than 50 percent of firms mystery shopped failed to insure that customers are given the basic information necessary to make an informed decision about this product; and many PPI products do not appear to be designed to meet the needs of the customers to whom they are sold.
The FSA have stated that they believe that customers would generally benefit from a more flexible Loan payment protection product that can be tailored to meet their needs and is targeted accordingly, and that they expect firms to take active steps to ensure they are meeting the three investigation outcomes identified as problem areas.
If you are lucky enough to get a loan in the current economic climate, do not take out the PPI that a lender is offering, because it will cost you at least four times the premium than that offered by independent companies such as British Insurance or Personal Accident. It pays to shop around and you’ll probably be offered better cover with less exclusions, so the only worry you’ll have is how to pay off your loan
Watford based secured loan broker, Loans.co.uk, one of the biggest employers in Watford, is to close to new business, taking with it some 276 jobs.
Last month the broker announced that it was struggling to ride out the Credit Crunch – explaining that the third party loans it relies on were in danger of drying up.
In a statement released yesterday the broker said it could no longer operate in this current environment and expected to complete its last customer loan early next year.
The statement read:
“A number of factors have led to this difficult decision. As a loan broker Loans.co.uk relies on third party providers to provide loans to its customers.
“A number of key partners have tightened lending criteria or are unable to accept new business. At the same time, house prices have been declining, making it more difficult for customers to fit within lenders’ (tighter) loan-to-value criteria.”
“Looking forward the company expects house prices will continue to decline and lenders will continue to be cautious. (Insuranceblogger agrees whole-heartedly, see our other credit crunch label posts.) The company cannot confidently project a recovery at Loans.co.uk in the foreseeable future and regretfully the decision has been made to run off the existing business. This will happen in an orderly fashion.”
The company confirmed that 276 positions would be lost. The broker has two other smaller offices in Preston in Lancs. and Fareham in Hampshire.
Recently Loans Directory - loans-uk.org.uk announced that the directory format of it's site (once one of the key loan reference points and authority sites) was no longer viable as a business format due to the number of loans available online being negligable.
The Competition Commission has today published for consultation its proposed remedies designed to increase competition in the Payment Protection Insurance (PPI) market.
In its provisional findings report published in June 2008, the CC concluded that distributors of PPI—such as banks, mortgage providers and credit card providers—face little or no competition when selling PPI to their credit customers.
The vast majority of the UK’s more than 13 million PPI policies are sold at the same time as a consumer takes out a loan or other type of credit and the CC found that many consumers are unaware that they can buy PPI from other independent providers.
Consumers rarely shop around to compare loan protection insurance prices and terms and conditions of PPI policies and rarely switch PPI providers. This ‘point-of-sale’ advantage makes it difficult for other PPI providers to reach credit providers’ customers and in the absence of such competitive pressure, PPI distributors are able to charge much higher prices than can be found at an independent supplier of loan payment protection.
Along with its provisional findings report, the Competition Commission published a Notice which outlined a number of possible remedies designed to increase competition in the market. Since then the Competition Commission has been collecting evidence regarding those possible remedies from PPI providers, consumer groups, the Financial Services Authority (FSA), the Office of Fair Trading (OFT), and other interested parties.
Following a series of hearings and a considerable amount of analysis, the Competition Commission is now proposing a package of measures which it considers will be practical and effective in increasing competition in the market to the benefit of customers.
The proposed package of remedies includes:
• A prohibition on the sale of PPI by a distributor to a customer within 14 days of the distributor selling credit to that customer. This will address the point-of-sale advantage, and give the customer more opportunity to compare products and providers, in turn encouraging greater competition between providers. Whilst the distributor cannot re-contact the customer for 14 days, customers will be able proactively to contact the distributor and purchase a PPI policy 24 hours after the credit sale.
• Credit providers will be required to provide a ‘personal PPI quote’, which will clearly state the cost of the PPI policy individually and when added to the credit product. If this is not given at the point of sale, the credit provider must do so if they subsequently contact the customer to offer PPI, and the prohibition period starts from the date on which the personal PPI quote is provided to the customer.
• A prohibition on the selling of single-premium PPI policies, which act as a barrier to customers switching and the costs of which are difficult to compare with other PPI policies. The CC considered whether mandating pro-rata rebates on single-premium policies would be a sufficient remedy, but has concerns about such a remedy which led it provisionally to conclude that it would not be sufficiently effective.
• A requirement on all PPI providers to provide certain information and messages in PPI advertisements (including the price of their PPI, expressed in a common format of monthly cost per £100 of monthly benefit required, and that PPI is optional and available from other providers).
• A requirement on distributors to advertise PLPPI (personal loan) and SMPPI (second-charge mortgage) alongside their respective credit advertisements so as to make it clear it is an optional product.
• A requirement on all PPI providers to provide certain information on PPI policies to the FSA and a recommendation to the FSA that it uses this information for its PPI price comparison tables.
• A requirement on all PPI providers to provide an annual statement for PPI customers, including information similar to that provided in the personal quote, to encourage customers to review their policy annually and make it easier for customers to decide whether to switch.
The proposed remedies have been published so that interested parties have a further opportunity to comment before the Competition Commission publishes its final report (currently planned for January 2009). This report will include the decision on the remedy measures to be introduced.
The Competition Commission last month published its separate provisional findings on retail PPI, a small part of the overall PPI market relating to protection taken out on repayments for shopping through home catalogues. The report concludes that, as with other types of PPI policy, retail PPI is highly profitable for distributors and there is little competition between providers on price and other factors, limited ability for customers to search for alternatives or switch products and a considerable point-of-sale advantage for the providers. Visit Personal Accident for more independent information on the cheapest loan payment protection insurance available
FSA fines Alliance and Leicester £7m for misselling Loan Protection
Alliance & Leicester has been hit with a record fine by the FSA of £7 million for serious failings in its telephone sales of Loan Payment Protection Insurance.
For three years from January 2005 to December 2007 A&L sold over 200000 Loan PPI policies to customers seeking a personal loan. The FSA has said that there was a general failure by A&L advisers to give customers details of the true cost of their PPI. In addition A&L sought to find reasons to sell PPI without properly considering what customers needed.
A&L did not make it sufficiently clear that Loan Payment Protection Insurance was optional and it trained its staff to pressurize customers where they queried the inclusion of PPI in their quotation or challenged independent financial advisers recommendations.
These failings resulted in unacceptable levels of non-compliant sales and a high risk of unsuitable sales over the three year period.
The FSA Director of Enforcement, said: “The failings at A&L are the most serious we have found. This is reflected in the record PPI fine. It is very disappointing that after three years of regulation we are still finding serious problems in PPI sales. Firms cannot rely on paperwork sent out later as an excuse for unclear or misleading statements given on the telephone.”
Simon Burgess of British Insurance, one of the country's leading independent suppliers of PPI who has been campaigning against misselling for years said "Although rather belated, we welcome the FSA's tough stance against anyone who mis-sells PPI."
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