PPI - Some Notes for Claimants..

[TideTurner]

From TimesOnline



Banks braced for billions in claims

The City watchdog has given consumers the green light to claim for ‘useless’ debt insurance, which many people don’t even know they have. Once they do, the revolt could be bigger than bank charges. By Clare Francis

Banks face being hit with billions of pounds in compensation claims for “useless” debt insurance in a consumer revolt that could be bigger than that over bank charges.
Millions of people with overpriced loan insurance — supposed to cover repayments if you can’t work — have been given the green light to claim for mis-selling after two announcements from the Financial Services Authority (FSA) in the past month.
Insiders say the scale of the scandal could eventually dwarf bank charges and even endowment mis-selling. There are some 20m loan insurance policies worth £5.5 billion in Britain, and one industry insider, who wished to remain anonymous, thinks as many as 70 per cent could have been mis-sold. If so, the industry could face claims worth up to £3.85 billion from 14m people.
By contrast, about 2m people are thought to be reclaiming ‘illegal’ overdraft charges at a cost to the industry of up to £1.2 billion a year, according to Credit Suisse, an investment bank.
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·Protection cover in the dock again
·The biggest scandal since endowments
Consumers have not yet started to revolt against debt cover, though, because so few know they have it: firms often add it to your loan without asking.
This is exactly what happened to Nasim Kanji, 58, a university lecturer from Oxhey in Hertford-shire. She did not realize she had been charged £9,000 for insurance for a £62,000 loan secured on her home until she went to Chase de Vere Mortgage Management, a broker, to remortgage.
Not only did the policy account for 15 per cent of the loan, but she would never had needed it anyway because she had savings set aside in case she lost her job.
Kanji said: “I had no idea I had been sold the insurance until it was pointed out by my adviser. I was horrified when I found out how much it had cost me. There is no way I would have taken out such insurance because I have assets that would cover my payments were anything to happen which stopped me working.”
Simon Tyler at Chase de Vere said: “This was terrible advice and there is no way such a policy was suitable.”
Consumers are therefore being urged to check their loan, credit-card and mortgage agreements to see if they have been sold protection insurance without realising it. If so, you have a very good case to lodge a claim.
An announcement last week by the FSA, the City watchdog, could open the floodgates. It said that people who had been sold single-premium policies, where the cost of the cover is paid upfront and often added to the loan, could now be eligible for refunds if they cancelled the loan part-way through the term.
In the past insurers pocketed the money. Now customers who have cancelled policies and got very little back are being urged to complain to their providers.
Matthew Turley, 30, pictured with his girlfriend, Rachael House, and their two children, Mitchell, 10, and Mia, 3, could be entitled to a refund. He took out a car loan for £4,700, but was charged an additional £5,612 for debt cover. Once this and the interest were added to the loan, his repayments would have totalled £14,537 — three times the amount he borrowed. This was not explained to him but he soon realised the mistake and repaid the loan. Even then he still had to pay £6,740 — £2,000 more than he borrowed.
He is in the process of trying to reclaim the £2,000 plus the interest he was charged.
The scandal goes beyond single-premium policies, though. The FSA indicated last month it thinks all payment-protection insurance has been systematically mis-sold for several years.
In a speech last month, Stuart King of the FSA said: “Our work in the PPI [payment-protection insurance] market has demonstrated it has not been sold correctly over a prolonged period. We have seen too many real cases of individuals who do not appear to have been fairly treated when purchasing PPI.”
Claims firms such as Brunel Franklin think the scandal could be even bigger than the FSA realises. They are just starting to win payouts for clients who have been mis-sold debt insurance, and they reckon the average refund could be in the region of £2,000 to £3,000, compared with about £1,400 for bank charges.
Ian Allison of Conkers, Brunel’s claims-handling firm for PPI, said: “The FSA’s speech was pretty explicit for a regulator, but I still don’t think it realises how huge this will be. We are just seeing the tip of the iceberg.”
The Competition Commission is also looking into PPI, following an inquiry by the Office of Fair Trading that concluded consumers had been stung for some £1 billion through the sale of overpriced debt cover. Since only one in four policies pay out, the cost to the consumer is even higher.
About 7m PPI policies are sold each year by banks and building societies when people take out loans, mortgages and credit cards. High-street stores also push the cover to customers buying electrical goods using instore finance arrangements. However, consumers can pay up to 10 times more for cover from these firms than they would from a stand-alone provider such as the Post Office or Paymentcare.
The policies are designed to cover your loan repayments if you can’t work due to an accident, sickness or redundancy, but they have many exclusions that are rarely explained at the point of sale. For example, PPI does not cover the self-employed, students or housewives. Nor does it pay out if you are sacked or have preexisting conditions that are not declared on the application form. Certain illnesses, such as stress and back pain, are also routinely excluded.
Teresa Fritz at Which?, the consumer lobbyist, said: “When the insurance was sold, the adviser should have explained it and investigated whether it was suitable for you. In most cases this hasn’t happened, so anyone who has PPI and doesn’t think it’s right for him or her should complain to the company that sold it.”
Ways to reclaim your money
Payment protection insurance — was I mis-sold?
If you were sold a policy that you later discovered was unsuitable, perhaps because you are self-employed, you can claim for mis-selling. You can also claim if you were never told about the cover or it was not explained fully.
What does the FSA’s latest announcement mean?
It relates to single-premium PPI policies where customers are charged a lump sum for cover that is added to their loan. The FSA estimates about a third of policies have been sold in this way. Many include ‘nil-refund’ clauses — if the cover is cancelled during the term, the policyholder is not eligible for a refund. This has been banned.
All new single-premium policies must include a ‘partial refund’ clause. The size of the refund will depend on how far into the term you are when you cancel. People who have made claims on their policies will not be eligible. Firms must also apply partial-refund conditions to all existing policies. Millions of customers who have cancelled policies in the past and received no refund are now being urged to ask their insurers for their money back.
So how do I lodge a claim?
Write to the company that sold you the policy. Ask for the cost of the PPI, plus any interest, to be refunded. You may also be eligible for claiming lost payouts, if you were turned down on a policy that you should never have been sold. The firm must reply within eight weeks. If it fails to do so, or you are not satisfied with its response, take your case to the Financial Ombudsman Service (financial-ombudsman.org.uk) or the small-claims court.
Bank charges — am I eligible?
If you have been charged a penalty fee for going overdrawn without permission or for having a direct debit refused, you can ask for the money back. If the Office of Fair Trading imposes a cap on the amount that can be charged, you are likely to get only the difference back. In the meantime, banks are refunding the full amount.

This refers to all insurances including PPI's and Mortgage Indemnity Guarantees which are often sold as 'House Insurance'


Tide

[Barobalti]

Perhaps a new thread is what I should be starting (will do, if so advised!) but my problem is that BoS / St Andrew's Group continue to move the goalposts re the reasons they would not entertain our PPI claim back in 2002.

"You can't claim via PPI because your wife's work is seasonal" we were told in a ‘phone call in 2002, when I lost my job.

(So, why did you allow me to sign for PPI in the first instance?)

THEN: When we started questioning this (with "CGA Enlightenment") in 2006, one Ms McCallum stated in a letter that the “seasonal occupation” clause had been misleading information from the start; however it would now appear that the reason I was deemed to have been ineligible for PPI was that I was made redundant within thirty days of signing the Loan Agreement. As this document was signed on 9th September, how could my date of leaving on 28th October possibly be “within thirty days”? Well, it seems that the “verbal notification of redundancy” (28th September 2002) was certainly “within thirty days” of signing for the loan. But how binding and enforceable is that?

I am questioning and challenging their definition of “notification of redundancy” and whether or not this clause was included in their policy at the relevant time. As I had no idea on 9th September 2002 that I was likely to lose my job in days to come, then how could BoS justify, in the name of all that is fair, their later refusal to honour PPI that I had paid for? What (say) if my former employer and I had formed a “gentlemen’s’ agreement” that the verbal notice of redundancy took place on 10th October in order to protect my PPI?

THEN: they start shifting the playing field level in terms of the definition of “redundancy” in that it is the verbal notification of redundancy (undocumented and uncorroborated?) carries more weight than the official date of termination of employment as per Form P45..

As St Andrew’s will no longer correspond with me directly I have written to the FOS to state that I reject the St Andrew’s Group findings and do not accept their definition of “redundancy”. I quote:

redun'dancy noun the state of being redundant; a dismissal, or a person dismissed, from a job because of redundancy; the presence of components which improve the reliability of a system (computing).
(Microsoft Encarta®)

redundancy noun (redundancies) 1 the state of being redundant, or an instance of this. 2 a the condition of being no longer needed in a company, organization, etc; b dismissal from work as a result of this; c someone who is dismissed in this way. 3 superfluity; the condition of being unnecessary to the meaning of the sentence, etc.
(Chambers Online reference)

This research appears to indicate that “dismissal” falls under the general definition of “redundancy”. I also disagree that verbal notice of unemployment should be construed as legally binding for these purposes.

Anyone suffering likewise, I’d be delighted to hear. Sorry to sound a bit like yoda, but I'm knackered and been on the CGA Forums all day!

Kind regards,

[reidnet]

Hi Ian,
It may be an Idea to start a seperate thread for your PPI, Just one idea if you can obtain a signed statement of truth form your ex employer that you were verbally informend on the 10th October that you were being made redundant, this would help you a great deal and of course is outwith their 30 Days.

Good Luck

Ian

[Barobalti]

Thanks Ian, bit NO CHANCE on the former employer initiative -- did not leave on the best of terms, and it is all carved in stone now anyway.

[jayenevin]

Hi All, I hope some of you can help.

I was sold a PPi policy with a loan that I had with HSBC. I was self employed at the time and HSBC knew this as my business accounts were with them. I then Refinanced this loan for a higher amount and again was sold the PPI policy even though I was self employed. I am now no longer self employed and work for a large company. I am still paying this loan.
My Question is, I know that I can claim for mis selling on the original loan but can i do the same on the second loan that I took out even though I am no longer self employed??

Regards

Jaye

[reidnet]

Hi Jaye,
I think the simple answer is YES you can claim for the mis-sold PPI on both loans. It may be advisable to start your own thread too, more people will be able to advise you there to.

I would need more Information on the type of policy that you were sold at the time on both loans, were these single premium policies ?, if so then I think they have added to your debt by selling this type of policy that is of no use to you and they should be made to rectify that.

If you need any help just shout or PM me

Good Luck

Ian

[jalex_uk]

I was sold PPI on a loan from SPPL back in June 2001. The loan was for £65k, and they added 9100 onto it for PPI in a lump sum, making the total amount of the loan £74.1k.
They then charged interest on the entire amount., on a monthly basis.
The insurance policy was non-refundable, and was due to last for 5 years (a much shorter period that the entire term of the loan). It wasn't even part-refundable in the event that I paid back the loan early (which I did 2 years later).

The loan was an "Unregulated Credit Agreement" secured on my property.

I was told when I agreed to the PPI that it was necessary to ensure the loan went through (which I since understand is untrue).

So I' have two questions:

1) Was I mis-sold this policy by being told I had to take out the PPI to make sure the loan was approved?

2) Does that fact that they added the PPI premium to the loan amount and charged interest on the total amount make the entire policy illegal and liable to be refunded?

3) Does the fact that it was an "Unregulated Credit Agreement" not covered by the CCA mean that I don't have a claim?

Many thanks to anyone who can offer any help!

[hellhasnofury]

Originally Posted by jalex_uk

I was sold PPI on a loan from SPPL back in June 2001. The loan was for £65k, and they added 9100 onto it for PPI in a lump sum, making the total amount of the loan £74.1k.
They then charged interest on the entire amount., on a monthly basis.
The insurance policy was non-refundable, and was due to last for 5 years (a much shorter period that the entire term of the loan). It wasn't even part-refundable in the event that I paid back the loan early (which I did 2 years later).

The loan was an "Unregulated Credit Agreement" secured on my property.

I was told when I agreed to the PPI that it was necessary to ensure the loan went through (which I since understand is untrue).

So I' have two questions:

1) Was I mis-sold this policy by being told I had to take out the PPI to make sure the loan was approved?

2) Does that fact that they added the PPI premium to the loan amount and charged interest on the total amount make the entire policy illegal and liable to be refunded?

3) Does the fact that it was an "Unregulated Credit Agreement" not covered by the CCA mean that I don't have a claim?

Many thanks to anyone who can offer any help!

Hello Jalex,

Best to start your own thread on the ppi section. any post you put on here may not be seen and you will not get the support and infor your need.

Question one yes

question two yes

questions three ????? maybe send a private message to one of the site helpers or modators for this advice. You need to read up on the CCA

[kippy2]

Originally Posted by jalex_uk

was told when I agreed to the PPI that it was necessary to ensure the loan went through (which I since understand is untrue).


3) Does the fact that it was an "Unregulated Credit Agreement" not covered by the CCA mean that I don't have a claim?

Many thanks to anyone who can offer any help!

tamadus one of the site helpers may be able to help with this. there is a CCA thread but rather long

[jalex_uk]

Thanks for the comments.. I've started my own thread on this over here:

http://www.consumeractiongroup.co.uk...tml#post738259

[Londoncitizen]

I just had a call from Lloyds to offer me a 'Goodwill Gesture' and repay part of the PPi, as apparently I had already recieved the remaining balance back when I paid my loan off early. I understand that I can also claim for interest. Not being great with Maths, could someone assist me in how to calculate the interest that I would be entitled to ask back for? Is it the statutory 8%? I really am not sure how to work it out. SOS, anyone !

[casbah]

Originally Posted by electrode101

Is their a template letter for claiming this back. I was told by Yes Car that I had to have it in order to get the HP and am wanting it paid back. many times I have asked them to cancel this insurence and they said that as it was paid in full by them at the outset of providing the policy that I could not cancel it. Grrrrr

Further to this........I have a car with Yes Car,now Direct Auto Finance, and under my contract it says that after I pay half the amount I can return the car and the loan will be finished, when I inquired about this, I was told that I could return the car but would still have the "insurances" to pay. I suggested that as there would not be anything to insure then I would not need to pay for the Insurance!!!! But was informed that the Insurances were paid in advanced and I still had this debt.
Also they charged me an interest rate of 14.9% on these "insurances" and I have just had to ring Yes Car and request the terms and conditions of the PPI which I wasn't given when I took out the loan. For a £4,000 car I am paying £8,100. which I think is extortionate. On receipt of the car there were quite a few things wrong with it, I complained but was told i'd signed the contract and that was that. Yes Car has gone bust so they are not selling any more vehicles, My mechanic has told me he doesn't think Direct Auti Finance can charge me for the PPI as there is nothing to insure. any ideas???

[hellhasnofury]

Hello,

If you post your questions on this sticky no one will be able to help you and follow your progress.
My advice is to read the different posts on the ppi threads to gain info about whether or not it has been mis-sold and how to reclaim in back.

Start your own new thread on the ppi forum and everybody will see and try to help you.