pa href=http://www.simplicityclaims.co.uk target=_blankPPI/a is a type of insurance policy which assists the borrower with repaying their loan if they are unable to work. Millions of payment protection plans have been sold in the UK over the last few years./pp/ppPPI is everywhere in the media.!–more– One of the main reasons for this is that it has come to the publics attention that such policies were widely mis-sold. After the scandal of the endowment mis-selling of the 1990s we are faced with yet again another scandal and the problem appears to be a lot more widespread. It appears that many lenders have not learned the lesson of past indiscretions./pp/ppSo why is the media making a big thing out of PPI? Well, the fundamental problem with PPI is that it is an expensive and inflexible insurance policy. Single premium PPI is rolled up into the loan from the beginning. This means that consumers not only pay interest on top of the loan, they also pay interest on top of the insurance premium./pp/ppWhen selling insurance to consumers, financial institutions should give them the full facts, especially if it influences their decision to buy the policy. The big issue with PPI is that it is so expensive. Instead of one monthly affordable payment, consumers are having to borrow more to pay for the insurance. Additionally, if the borrower wants to pay off their loan early, they lose a lot of the money that has been paid into the payment protection plan./pp/ppAnother reason why PPI was mis-sold is that many of these loans last longer than the insurance policy. So if someone takes out a loan over a 120 month period, they will only be covered for half the duration of the loan. The consumer would then be left without cover for the rest of the loan period./pp/ppAnother fundamental problem with PPI is that it only pays out in specific circumstances. Some medical conditions are not included. In addition to all this, if you werent on a full time permanent contract, it could be difficult to claim for unemployment./pp/ppHaving said all this, the problem doesnt simply lie with the nature of the policy itself, but the way it was sold to customers. One major issue is that many consumers thought they had to take out PPI in order to get the loan. People who take out loans often need the money urgently so they have less time to energy to combat any pressurised sales./pp/ppThe FSA has taken tough decisions regarding the sale of payment protection insurance. It wrote to major lenders in February 2009 asking them to withdraw the sale of the product as soon as possible and no later than 29 May 2009. The regulator is focussed on how the product is sold and whether the sales process is fair to consumers./pp/ppMore recently, the FSA has increased its role as regulator. It has issued new guidance regarding the way lenders are treating complaints about PPI and has also ordered a review of previously rejected complaints./pp/ppSeveral lenders have already received fines from the FSA due to the poor sales practices. Now other major lenders are taking steps to improve their processes to avoid the wrath of the FSA./pp/ppInstead of buying a single premium policy it is possible to buy a standalone policy. These policies tend to have less stringent conditions for making a claim and also tend to be less expensive. They are not added to the cost of the loan so the customer could easily cancel the policy at any time without losing out financially. Having said that, with all insurance policies, it is worth checking the small print to see whether there are circumstances where you are not covered by the policy./pp/ppSo what does a consumer need to do if they find that they have been a href=http://www.simplicityclaims.co.uk/missold-ppi.htm target=_blankmissold PPI/a? Well, the first thing to check is whether the policy was sold before 14 January 2005 or after January 2005. Anything sold before this date is classed as an unregulated sale and will be subject to different rules. What this means to the consumer is that they need to be aware when making a complaint whether the sale of the policy is classed as an advised sale or a non-advised sale./pp/ppOnce this has been established, the consumer will then need to ensure that they have the documentary evidence relating to their claim. The most important details to have are the loan agreement number, the date of sale of the policy, the term of the loan and the total cost of the insurance policy./pp/ppA complaint will need to be carefully drafted based on the consumers personal circumstances at the time of sale. It can also be helpful to have a basic understanding of the Statute of Limitations Act, the Misrepresentations Act and the ICOBS provisions as they relate to payment protection contracts./pp/ppConsumers may also need to consider that their complaint may be rejected in the first instance. There are rules governing what constitutes a final decision and there may be options which allow the consumer to appeal against the decision. In some circumstances, complaints can be appealed through the Financial Ombudsman Service, which itself has different levels of appeals./pp/ppTo simplify the whole process, a consumer can contact a claims company who can handle their a href=http://www.simplicityclaims.co.uk/payment-protection.htm target=_blankmis sold payment protection/a claim on their behalf. A claims company will usually know the ins and outs of making a complaint and should have the necessary experience and expertise to make a large number of successful claims. Some consumers may not have the time and energy for a protracted battle with their lender, so leaving it in the hands of a specialist company may be a good option to take./p
Tags: mis sold payment protection, missold ppi, ppi
Posted in Uncategorized |
