PPI Claims: Don’t Get Stung Twice

PPI Claims: Don’t Get Stung Twice

by Paul Forrest on 2 Feb, 2012

The mis-selling of Payment Protection Insurance (PPI), which has incurred the wrath of both the Financial Services Authority (FSA) and the Financial Ombudsman, has spawned a growth industry in Claims Management. A plethora of businesses that offer incentives such as no win – no fee has sprung up since the practice of selling to unwitting consumers and businesses, what initially seems a sensible precaution in protecting repayments of loans and credit arrangements, has attracted considerable negative publicity.

PPI is generally offered by banks, financial institutions and stores as an add-on to loans, credit cards and other financial products. PPI is sold in order to offer peace of mind to customers, in the event that illness or redundancy, for example, would make it difficult to keep up repayments. In essence, taking out PPI would appear to be, particularly given the current economic climate, a wise choice,

The financial authorities have no problem with PPI as a product.  The issues lie with how the product has been sold. There have been many complaints that PPI has been sold without the knowledge of the consumer. Customers have also encountered problems when trying to make a claim. With the FSA being seen to flex its muscles and fine those companies who have been found to have sold the insurance incorrectly, reputable claims management companies have successfully represented customers who have been mis-sold PPI.

The perceived promise of easy pickings has also attracted the attention of a number of businesses wishing to make a killing from vulnerable victims. The attraction of no win-no fee representation might give the impression of cutting out the risk associated with making compensation claims. This is not to suggest that all claim management companies who provide a no win – no fee service are dishonest; it would be wise, though, to shop around compare fees and success rates.

Many financial institutions who sold the PPI policies have been quick to realise the benefit in settling PPI claims without fighting through the courts. Barclays Bank, for instance, made provision of £1 billion for compensation claims. HSBC, Lloyds Banking Group and the Royal Bank of Scotland (RBS) which includes Natwest, have all budgeted for claims payments.

Nevertheless, if you feel that you have a case for claiming compensation, you would be well advised to seek professional advice from a reputable Claims Management company. You will be able to take advantage of the company’s experience in dealing with multiple providers. They will have an experienced team dedicated to the claims. They will also have legal knowledge in working out whether an offer is fair.

It certainly would be prudent for anyone who feels that they have been a victim of being mis-sold PPI, to approach a few claim management companies. Check the real cost of using a no win – no fee company against one who has a fixed scale of charges.

The Ministry of Justice has set out, on its website, guidelines for would-be PPI claimants. The excellent factsheets for both businesses and individual consumers highlight a number of promises made by PPI Claims companies that could be misleading and require substantiation.

The Claims Management Regulator set up by the Ministry of Justice, authorises Claims Management businesses to make claims on behalf of consumers who believe they may have been mis-sold PPI. The Claims Management Regulator’s website lists authorised businesses as well as showing which PPI claims companies have had their authorisation cancelled or suspended.

In conclusion, if you think you have been mis-sold a PPI policy, check the Claims Management Regulator’s website which will help you to judge whether you have a case. Always seek advice from a reputable Claims Management Company; ask at least two different companies for full details of their charges.

About the Author

Paul Forrest

Paul Forrest is an experienced writer in many fields of interest and we are delighted that he will now be a regular contributor to ukmoneymarket.co.uk in 2012. paul.forrest@articlewriter.biz www.articlewriter.biz