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SIPP Scandal: The New Wave of Payment Protection Insurance

Self-Invested Personal Pensions or SIPP owners might find themselves making a claim for mis-sold pension investments in the next few years.

Claims management expert Rob Ridge from Money Redress stated Britons are unaware about the scandal surrounding SIPPs. He speculates it may deal further damage than mis-sold PPI as those mis-sold investments can receive a maximum of £50,000-£150,000 for every recompense.

Ridge speculates the SIPP scandal will reach heights above £10 billion, which is 25% of the £40 billion payout for payment protection insurance.

The mis-selling storyline happens as so: Financial advisers out to scam savers will promise them massive 20 per cent returns on their pensions reinvestment incrementing each year. The get-rich-quick scheme involves seemingly feasible investments such as airport parking spaces, holiday properties, and green energy projects.

While the saver receives an increment to their pensions, it is not as high as their initial investment. The agreement will never guarantee returns by the promised deadline.

Experts and observers found the SIPPs circumstances similar to the initial discovery of payment protection insurance mis-selling. Ridge believes the impact of the new scandal to the newly-recovering financial services industry is unprecedented.

PPI claiming is set to end on 29 August 2019. With the new scandal looming on the horizon, it is possible the industry’s consumer confidence rating will once again be at an all time low.

Who Refunds Your PPI Claims?

The banks will refund your successful PPI complaint. Because of their bank employees’ unscrupulous sales tactics, banks now take the stage in refunding consumers their rightful refund and compensation for an insurance policy they cannot hope to use due to their ineligibility.

You are mis-sold PPI if you were already sick, injured, unemployed, or self-employed during the time a bank employee or financial adviser sold the policy to you. In addition, if your financial adviser did not disclose substantial commissions (above 50% of the insurance policy’s sale value) from your policy, consider it mis-sold under the Plevin clause.

What Do You Need for a Successful Claim?

To prove your sickness, injury, or lack of employment or self-employment, you will need documents to serve as evidence.

For sicknesses or injuries, a medical certificate from your attending physician during your treatment will indicate that before the PPI’s sale, you were already suffering a malady that renders you ineligible for the policy’s benefits.

For unemployment or self employment, your last payslip or business permit are enough to validate that previous to buying the policy you were unemployed or running your own business.

What To Do In Case Banks Reject Your Claim?

Banks will do anything in its power to avoid refunding you at any point. However, the Financial Ombudsman Service will investigate in-depth to help you reclaim all your refunds. The FOS’ decision is final. If its judgement was not in your favour, then you will need to settle with the bank’s decision.

Three Difficulties You Can Prevent When Claiming Mis-Sold PPI Refunds

The FCA’s 29 August 2019 deadline is coming closer. Before you lose your chance to claim your refunds, it is vital to make a claim as soon as you possibly can. Unfortunately, that means having to file your complaint alongside hundreds of thousands just about to do the same. Here are three common PPI claim difficulties and the solutions you can take to ease the process.

Proving You Were Mis-Sold

Bank employees used unscrupulous tactics to sell PPI to ineligible customers. If you have documentation that proves you were unemployed/self-employed, injured, or suffering a medical condition during the time you took out your financing with PPI, you can easily prove you were mis-sold the policy.

Banks Only Keep Six Years of Transaction Records

Banks will try to keep customers off their back by citing they only keep six years worth of transaction records for any financing including mortgages. However, a credit score review allows you to see the entire transaction performance beyond six years for any financing you took out including all the PPI repayments you’ve made.

Going to the Financial Ombudsman for Re-Processing

The FOS will give the final verdict for any mis-sold PPI conflict but takes plenty of time from customers having to do a second round of making claims. By contacting a PPI claims company, they can save time and allow themselves their full refund and compensation.

 

PPI Claims: The Story So Far

Payment protection insurance, designed to repay loans, mortgages, and credit cards for one year when a borrower gets sick or becomes unable to pay, has become the biggest taboo word in the last decade. With over half the UK’s population mis-sold through unscrupulous lender’s tactics, the scandal has reached up to £40 billion since 2009, the year consumer groups and the Financial Services Authority (now Financial Conduct Authority) had made the scandal public knowledge.

The FCA has declared August 29, 2019 as the last day to reclaim refunds from banks in March 2017. Despite the protests of consumer groups and a failed lawsuit a claims management company pursued, the deadline is pushing through.

Supplementing the PPI scandal’s impending end is an FCA and bank-sponsored public service advertising campaign featuring the voice and disembodied head of Arnold Schwarzenegger telling UK consumers and citizens in different situations to make a claim and “do it now.”

The advertising campaign has been relatively successful. The commercial had garnered 40% more complaints in the first year of its airing. However, consumer advisor and financial expert Martin Lewis claims the City watchdog’s commercial may be misleading.

Its call-to-action asking consumers to search Google for “FCA PPI” may trigger search engine algorithms that display claims management company advertising links at the top results. Consumers may be misled to think that to claim PPI refunds they would have to pay, which isn’t the case.

Payment Protection Insurance is Efficient If You’re Qualified

Payment protection insurance or PPI is the most notorious UK financial product. The problem is not because banks can’t pay for their benefits. Because of unscrupulous employee sales tactics, millions of UK citizens were mis-sold the insurance policy.

If you’re ineligible because you didn’t qualify for the policy’s requirements, then you’re likely mis-sold. However, if you did qualify, then if you get into any situation that renders you temporarily unemployed and incapable of paying your financing, then the insurance policy can definitely help you.

PPI is an efficient product in itself. However, because it is used as a profits-amassing product preying on unaware consumers’ concerns regarding a faster loan application approval or improving their credit scores to qualify, it became a negative word throughout the country.

It has accumulated over £40 billion in refunds back to rightful consumers. Daily, the refunded total increases, and each consumer is likely to receive £3,500 for a basic PPI policy inclusive of their 10% compensation for the trouble.

If you own a PPI policy that you are qualified to use, then you cannot claim for refunds. However, if you can prove through medical reports or payslips that you purchased the policy despite being ineligible, then you can make a claim to receive all your repayments.

How to Avoid Getting Mis-Sold PPI and Any Other Financial Product

Banks have started pulling the plug on publicising their protection products especially payment protection insurance. The notorious insurance policy that had left millions trying to claim back worth £3,500 of payments continues to plague the UK’s financial industry. To avoid facing the same issues in the future with other financial products, here are three things you need to keep in mind.

Do You Really Need It?

If you’re taking out financing, make sure to check your credit scores beforehand. A check allows you to see if the industry is confident in your ability to make repayments for a new loan or mortgage. Doing so allows you to see if you really need any PPI or insurance policy that repays your financing.

No Specific Brand

If bank employees tell you a specific insurance policy is needed for a financing and your credit scores indicate you have a below-average risk rating, then you must take out a policy. However, the bank cannot specify a policy they offer or any brand they refer to explicitly. A single insurance product cannot qualify all customers in the same way.

Read The Terms and Conditions

Lastly, before taking out a financial protection product, see if the product’s terms and conditions make you eligible to make a claim should you need it. Millions of UK consumers mis-sold PPI were ineligible upon purchasing their insurance. While majority of these cases were due to unscrupulous sales tactics, it is better to be safe than sorry by reading the terms and conditions before leaving a signature.

Three Ways To Avoid Any Hiccups Working With PPI CMCs

There are two kinds of claims management companies (CMCs). There are helpful and informative companies that do not force you to use their services and offer useful consultation advice. Then there are others that just want to grab your money from the get-go.

Sometimes, these CMCs would even ask for their part after you successfully received your refunds through a claim you filed by yourself. Here are the steps to avoid that particular issue.

Make No Win No Fee Clear From the Start

CMCs that offer a no-win no-fee basis should make it clear to you from the start that if they are initially unsuccessful with your claim, then they have no right to receive any payment. Upon reading your contract, find these details immediately and sign only if these are present. Keep a copy for yourself as well.

Execute a No-Payment Contract After an Unsuccessful Service

Regardless whether you signed a contract that has the CMC acknowledge they have no claim to your refunds after their unsuccessful rendition of service, have them sign another contract after you officially stop using their service. Once again, make sure to keep a copy for yourself.

Ask The Bank Not To Inform Any CMCs On Your Successful Claim

Lastly, make it clear to the bank servicing your successful complaint that no CMCs should be informed about your success. It is impossible to determine whether they would respect this request. In case they do inform the CMC and the latter asks to receive payment for your successful claim, present the original no win no fee contract and your no-payment contract thereafter.

Morgan: FOS Guilty of Mishandling PPI Claims Unless It Proves Otherwise

Treasury Select Committee Chairman Nicky Morgan said that the Financial Ombudsman Service, British Consumer’s final defence against unscrupulous financial products and sales tactics, must present evidence else it is guilty of mishandling PPI complaints in favour of banks.

A Channel 4 undercover journalist team showed that FOS employees giving into stress and huge workloads did not initiate proper detailed investigations, which led to poor decisions for mis-sold PPI claims.

The Ombudsman’s decision on lender and borrower dealings is final and cannot be reversed.

According to Morgan’s letter to FOS Chief Ombudsman Caroline Wayman, the FOS needs to reopen cases “it feels were not decided correctly.” She also asked Wayman for the number of people affected by the improper case handling.

Employees from the FOS said they did not pore over every detail as they should because of the huge number of pending claims they need to address. Most employees fear missing out on pay rises and promotion opportunities because of immense backlogs, leaving them to make half-detailed decisions on their investigations.

The FOS itself said in a statement that the programme can always be improved and a review by the non-executive board to clarify the concerns raised is encouraged.

The Ombudsman receives about 4,000 complaints on a weekly basis. In the past, it had upheld 7 out of 10 complaints in the favour of consumers.

PPI Claims: How to Address an Unfairly Rejected Claim

Banks and financial institutions can and will reject valid PPI policies. Even if you have strived to gather enough data to support your claim, financial institutions can shoot down your complaint citing data deficiency on their end. Their claim is unfair, therefore, you can redress these abusive bank behaviours with the following.

Data Access / Credit Score Request

Banks can cite the six-year customer data clause to bypass your activity during your financing’s early days. However, a data access or credit score request can reveal all your activities and show all the repayments you’ve made for your financing.

Speak to the Financial Ombudsman

The Financial Ombudsman can conduct a complaint review and make a final decision on your complaint. However, the complaints processing might be slow because you will resubmit to the FOS your complaint and wait a few more weeks for the results.

Make a Petition

If the bank rejects your complaint despite your evidence that they had mis-sold your policy, then you can make a petition to take the financial institution to court. However, this process may take some time. Therefore, it is advisable that you only use this in dire circumstances or if you have multiple mis-sold PPI policies.

PPI Claims Tips: Identifying Instances of Mis-Seling

The Financial Conduct Authority has made August 29, 2019 the final date to claim for mis-sold PPI. The insurance policy made headlines after millions purchased the insurance under the impression it was a financing requirement. If you wish to make a claim soon, take note of the commonly accepted arguments that consider your insurance as mis-sold.

A Specific Brand Was Forwarded

Lenders can require borrowers to have payment protection before approving their financing. However, lenders cannot require the purchase of a specific insurance brand.

Every borrower lives in different circumstances. Therefore, no single insurance policy can render them eligible. As a result, millions of consumers mislead by their lenders purchased PPI.

It Boosted One’s Credit Score

Credit scores rise and fall depending on your payment attitude. If you pay on time and in full, then you have excellent credit scores. Therefore, having an insurance policy does not increase your score to qualify you for higher-value financing. If the argument of increased credit scores through PPI purchases was set before you, then if you purchased the insurance, you can make a claim.

‘High-End Deals Require Protection’

If lenders told you PPI is required to have higher financing, then it is a legitimate claim. Meanwhile, if they asked you to purchase a top-rank PPI policy that you have no use for, then you can make a claim for it. No specific PPI policy can be forwarded as a requirement.