Payment protection insurance or PPI is a multibillion dollar industry in the United Kingdom, amounting to $7 billion dollars worth of gross profits every year. PPI is a type of personal finance that insures ones current debts and liabilities for a period of one year. These debts and liabilities are usually personal loans and credit card bills that are usually purchased from banks. PPI similarly covers mortgages, although not as prevalent as PPIs with personal loans and credit cards.
Mounting PPI's and Mounting Concerns
Every year, there is an estimated seven million new PPI policies sold in the United Kingdom. However, millions of angry consumers have gathered themselves against the banks who sold them PPI for allegedly not informing them about it. Mounting evidence show that consumers were not told they were sold PPI by banks as they were taking out different loans and credit cards. Under the law however, it is illegal for lenders to misquote a product by selling it as an attachment to loans. The Consumer Protection Code lays down that different services and products, including financial assistance like loans and insurance, should always be quoted separately in order not to mislead the consumers.
Other problems that make it harder for consumers to detect PPI in their policy agreements with banks include the financial jargon often written in contracts, which makes the policy difficult to comprehend. Another culprit is the fine print usually located at the bottom of the contract, making important provisions barely readable. Because of these, a large number of consumers have PPI that they could not afford which are hardly suitable to their needs.
Unprecedented Fine
The Financial Services Authority, the watchdog for mis-sold loans insurance and other forms of financial products, has already fined several major banks in response to mounting claims made by consumers and claims companies. To underline its seriousness about the agenda, it fined HFC Bank a whopping 1.1 million, the largest ever imposed for financial misdeeds. Critics however, say this is just a fraction of what the banks are making in mis-sold PPIs, and want the FSA to be more stringent with financial institutions.
Clogged PPI Complaints
According to the Financial Ombudsman Service or FOS, the government bureau that handles individual disputes between consumers and financial institutions, it receives daily complaints about PPI numbering to the hundreds. For this reason, the FOS has set up additional offices and manpower purely to handle PPI concerns. Frustration however, has settled over many Britons waiting in line for their papers to be processed by the FOS. Some people are still waiting after 18 months for their cases to be processed, receiving only letters of assurance from the FOS that their complaints are being looked at.
Claims Companies: a Viable Option
As a result of the slow proceedings at the clogged FOS, many people turn to claims companies, who charge a meager 20% of the total compensations and claims returned from the policy. For most, 20% is not a bad thing to lose out of the 3000 being awarded to those who win cases against the banks. Not all policyholders are eligible to make claims. Claim companies require potential claimers to fill out forms that require details and information on how one took out the PPI, what circumstances were present during the sales process, and whether one is unemployed, sick, or already disabled when they make a PPI. The advantage in approaching claims companies is that they do not charge upfront fees for their services, that is why consumers feel free in directing their cases to them. This is one way of ensuring that you get the compensation you deserve when it comes to PPI.
Mounting PPI's and Mounting Concerns
Every year, there is an estimated seven million new PPI policies sold in the United Kingdom. However, millions of angry consumers have gathered themselves against the banks who sold them PPI for allegedly not informing them about it. Mounting evidence show that consumers were not told they were sold PPI by banks as they were taking out different loans and credit cards. Under the law however, it is illegal for lenders to misquote a product by selling it as an attachment to loans. The Consumer Protection Code lays down that different services and products, including financial assistance like loans and insurance, should always be quoted separately in order not to mislead the consumers.
Other problems that make it harder for consumers to detect PPI in their policy agreements with banks include the financial jargon often written in contracts, which makes the policy difficult to comprehend. Another culprit is the fine print usually located at the bottom of the contract, making important provisions barely readable. Because of these, a large number of consumers have PPI that they could not afford which are hardly suitable to their needs.
Unprecedented Fine
The Financial Services Authority, the watchdog for mis-sold loans insurance and other forms of financial products, has already fined several major banks in response to mounting claims made by consumers and claims companies. To underline its seriousness about the agenda, it fined HFC Bank a whopping 1.1 million, the largest ever imposed for financial misdeeds. Critics however, say this is just a fraction of what the banks are making in mis-sold PPIs, and want the FSA to be more stringent with financial institutions.
Clogged PPI Complaints
According to the Financial Ombudsman Service or FOS, the government bureau that handles individual disputes between consumers and financial institutions, it receives daily complaints about PPI numbering to the hundreds. For this reason, the FOS has set up additional offices and manpower purely to handle PPI concerns. Frustration however, has settled over many Britons waiting in line for their papers to be processed by the FOS. Some people are still waiting after 18 months for their cases to be processed, receiving only letters of assurance from the FOS that their complaints are being looked at.
Claims Companies: a Viable Option
As a result of the slow proceedings at the clogged FOS, many people turn to claims companies, who charge a meager 20% of the total compensations and claims returned from the policy. For most, 20% is not a bad thing to lose out of the 3000 being awarded to those who win cases against the banks. Not all policyholders are eligible to make claims. Claim companies require potential claimers to fill out forms that require details and information on how one took out the PPI, what circumstances were present during the sales process, and whether one is unemployed, sick, or already disabled when they make a PPI. The advantage in approaching claims companies is that they do not charge upfront fees for their services, that is why consumers feel free in directing their cases to them. This is one way of ensuring that you get the compensation you deserve when it comes to PPI.