According to the Financial Conduct Authority, the number of PPI complaints it had received from January to June of 2017 had increased by 24% compared to the same time frame in 2016. The watchdog attributes the increase to its March announcement of the PPI claims deadline on August 29, 2017. The watchdog believes the numbers will continue to grow in the following years provided its ongoing advertising campaign is urging consumers to make their own claims as soon as possible.
According to FCA Chief Executive Andrew Bailey, UK consumers lack an incentive to make a claim due to the lack of a PPI claim deadline. Its advertising campaign, while awkward and a bit strange, is effective in raising awareness about payment protection insurance. However, it still lacks technical explanations about how to make a PPI claim and how to receive compensation.
Consumer groups had been against the deadline given the elderly and non-tech savvy individuals are left out of the advertising campaign’s loop. They also noted the banks’ lack of simplification towards improving the procedures to claim refunds and continuing rejections of legitimate complaints.
The UK’s finance sector has set aside a total of £40 billion for mis-sold PPI, making it the most expensive financial scandal in the UK.
If you never thought that you were sold PPI because the bank employee or financial adviser sold you a different insurance policy, beware that it could be wrongly sold as well. Payment protection insurance is not the actual financial product name, but rather a description of the item’s function for your financing. Here are three names it is commonly known.
Mortgage Protection Policy
Mortgages are paid yearly inclusive of interest, which makes it imperative that lenders require a protection plan in case the borrower gets sick or encounters a situation that they cannot provide payments. A mortgage protection policy helps provide a year’s worth of repayments, but only if the insurance holder is eligible.
Credit Card Payment Guarantee
Similar to mortgage protection policies, credit card payment guarantees and insurance repay a year’s worth of credit card repayments. Lenders will require this from high-risk borrowers, but they cannot ask them to purchase a specific brand because all financial products have different terms and conditions.
ASU Payment Plan
Accident, sickness, and unemployment payment plans (ASU) allow borrowers to pay one year of repayments for their financing. However, once again, banks and financial institutions cannot ask applicants to purchase a specific ASU brand because each policy’s provisions differ from one another.
The Financial Conduct Authority (FCA) has made it clear that beyond August 29, 2019, no complaint about payment protection insurance will be addressed by the watchdog or any financial institution. The deadline was set in place to encourage consumers to act upon their refunds immediately. If you’re not keen on how your bank employee might have mis-sold your insurance policy, here are a few ways how.
Bank employees and even financial advisers may have told you that the insurance policy was a requirement to go with the loan. However, they must tell you that you can opt for other policies, and you can pull away from purchasing the product they present you because you are ineligible for it. Consider a policy you purchased at face value mis-sold.
Some banks approve loans for junk credit and retired applicants but add an inconspicuous payment protection insurance without informing the customer. If you had found a miscellaneous item in your series of billing statements, you are possibly mis-sold PPI.
It Raised Credit Scores Quickly
Financial insurance products only guarantee payments for a time period in case something happens to the individual. However, every insurance policy has different criteria. Even if an applicant includes it with their financing, it will not increase their credit scores immensely.
Hundreds of thousands of PPI complaints were reopened after Susan Plevin won her case against Paragon Personal Finance, establishing the clause that all products sold by a financial advisor or bank employee who had received more than half its price is invalid and due for refund. Here are three things to know if you believe you have a “Plevin PPI.”
A Very High Commission
As mentioned earlier, if the bank employee received substantial commission from selling you the insurance policy, you are due a refund from the insurance policy. Make a claim against your bank and have an independent body investigate your complaint to verify whether your insurance seller received a very high amount after selling the insurance to you.
If you had already claimed your PPI refunds successfully, you cannot make another complaint because of Plevin’s clause. It is fair that you had received substantial compensation, and you will not be refunded anything else other than the original price and repayments you had made for the policy.
You Can Still Work With the Financial Ombudsman
The Financial Ombudsman is also informed of these events and will still investigate on behalf of customers free. However, the Ombudsman’s decision is final and if your policy’s circumstances are not compatible with Plevin, it is likely your insurance was mis-sold in another way or not at all.