The financial services regulator, the Financial Services Authority (FSA), is due to publish a report on the way PPI has been mis-sold to customers because of the incentives and commission paid to staff. Staff at banks and other financial companies have been paid large amounts of commission for the insurance products they sell and in many cases even if the customer, didn’t want it, didn’t it or couldn’t claim on it.
The report states that the way in which banks and insurance company staff were incentivised to sell products was not in the public’s best interest and should stop. Banks and insurance companies have made huge profits from the mis-selling of insurance products such as PPI because they are usually of low value but offer high margins to the seller. One scheme involved staff being forced to ensure that 80% of all loans that were being sold had to have PPI attached! No insurance product should be sold in this way, all insurance products should be sold because the client has a need or a want for them, not because the sales person needs to hit his or her target.
Anyone who has been sold PPI should be urgently reviewing their needs for this type of cover and should be questioning whether they were potentially mis-sold this expensive product. You can of course make these enquiries yourself and ultimately take the matter onto the Financial Ombudsman Service, but would you trust a company that has mis-sold you a product in the first place to put things right for you? If the answer is ‘no’ then you should be using the services of Claim 2 Gain who will deal with the claim on your behalf. We don’t charge any upfront fees and only charge a fee, of 25%, plus VAT, if your case is successful.
If you have been mis-sold a financial service or product you can make a complaint to the company that sold you the product directly and if they reject your claim you can take it on the Financial Ombudsman Service for free.
However, if you aren’t confident about dealing with a complaint, aren’t sure exactly why you were mis-sold the product (and don’t think that by simply writing a letter to your bank saying ‘I was mis-sold this product because a website told me I was’ will work, because it won’t) or just don’t have the time to deal with a complaint, then maybe you need some help and some advice in making your complaint on the right lines and basing your arguments on the correct regulations. This is where a good quality Claims Management Company comes in. Most people today lead busy lives and just don’t have the time, and in many cases, don’t have the inclination to deal with a faceless bank or loan company, being passed from one call centre to another and finally being fobbed off with a standard letter from the Head of Complaints in a large building in a town you have probably never heard of.
If you decide that the DIY route for your claim is not the way you want to go then a good quality Claims Company is probably your best option. But before you sign on the dotted line make sure you know what you are signing up for.
Never pay any upfront fees.
As with all business and services, there are some companies that are not legitimate and are scamming people out of money. Most Claims Companies will work on a ‘No-Win, No-Fee’ basis and if you don’t win your claim you don’t pay them a penny, so why would they need to take an upfront fee from you? You could have lost money once already, don’t lose even more. A good Claims Company is prepared to take the risk that your claim won’t be successful – let them take the risk, not you.
Make sure they are properly regulated by the claims management regulator, the Ministry of Justice.
All companies dealing with claims related to financial services or products must be regulated by the Claims Management regulator, the Ministry of Justice. Check that they are properly regulated by checking the Ministry of Justice website. If they aren’t regulated they are breaking the law.
Make sure you know what the charges will be and how the charges will be calculated.
If you employ a Claims Company to make your claim on your behalf they will charge you a fee and this will have to be paid from the refund or compensation you receive. However not all companies charge in the same way. If your loan has not been repaid in full and the premiums for your mis-sold PPI were added to the loan as a single premium then your loan company will remove the remaining unpaid PPI from your loan which will reduce your future loan repayments. Most Claims Companies will charge on this reduction as well as any cash you receive and this could leave you paying more in fees than you receive in cash!
One of the big advantages of using a good quality Claims Management Company is that they are on your side and they want to ensure you get the maximum refund or compensation you are due. For many years banks and loan companies have been trying (and still are) to minimise the amount they pay back to customers they have mis-sold products to. So can you ever be 100% sure that their calculations are correct or are 100% accurate? For quite some time one bank in particular was issuing standard ‘goodwill offers’ of a maximum of £750 to anyone that made a complaint (unless of course they were owed less than £750 in which case they were offered the lower amount). Other banks and loan companies have refused to refund the interest paid on the PPI premiums and have limited the amount of premiums they will refund – if you don’t know what you are due you will not know that you could be owed a considerable amount more.
Even when a complaint goes to the Financial Ombudsman Service (FOS) because they are ‘independent of both the consumer and the company’ they cannot always act in your best interest. If your bank or loan company makes you an offer that is less then you are due the FOS WILL NOT tell you and in fact CANNOT tell you, but as the offer has come from the FOS most people will incorrectly assume it will be correct. Unfortunately the FOS never checks any offers and cannot tell you whether you should accept an offer or not. However a Claims Company is NOT independent of you and should act in your best interests. So a good Claims Company will check every offer and ensure that you are getting the maximum refund you are due. The FOS is not a checking service, but a Claims Company can be and it is in their interests to ensure you get the money you are entitled to.
So if you don’t know how much you are due, the consumer websites don’t tell you how to work it out and the FOS can’t tell you how much you are due, how do you know you aren’t being ripped off again by the same company that mis-sold you the PPI in the first place?
The financial services regulator, the Financial Services Authority (FSA) has told banks and loan companies that they should review the past sales of Payment Protection Insurance (PPI) policies and write to customers who they find may have been mis-sold these policies even if they have not made a complaint.
This review sounds like a good deal for customers and may mean that some people will get back the premiums they have paid for mis-sold PPI policies. However, what the FSA has not done is set down any guidelines on what the banks should be looking for and who they should be contacting. The banks and loan companies are being allowed to decide which policies were possibly mis-sold and which clients this may affect. It is therefore vitally important that no one sits back and waits for their bank or loan company to contact them or to simply send them a cheque. For many years the banks and loan companies have defended the sale of PPI policies and continue to defend the sale of many policies still.
When or if the banks write to their clients they won’t be telling them ‘we have mis-sold you this policy because…’ what they are more likely to say is ‘it is possible you have been mis-sold this policy and if you feel you have been mis-sold you should raise a complaint about this now’. Your bank or loan company is not going to investigate the sale simply because they have written to you and won’t simply send you a cheque if you write back and say ‘I think I have been mis-sold because you have told me I may have been’. Any complaint made will need to be made in the correct manner, will need to be based on facts and will have to explain why the policy may have been mis-sold. And if you don’t respond to their letter, then you may run out of time and NEVER be able to get back the money you are due.
It is now more important than ever that you look at your loans, past and current and if you feel you have been mis-sold PPI you should reclaim the PPI premiums as quickly as possible. Don’t wait for the banks to admit guilt, they wont and don’t let time run out on your claim. Get your claim in now and beat the PPI deadline!