The Financial Services Authority (FSA) has been regulating the
selling of Payment Protection Insurance (PPI) since 2005 regardless
of whether it is sold by a bank, insurance company, a high street
shop, or credit provider. Since 2005 anyone that sells PPI will
need to have authorisation from the FSA.
The FSA has enforced various rules which regulate the selling of
insurance products, including PPI. These rules are stated in the
FSA regulatory handbook and are referred to as the Insurance
Conduct of Business Standards (ICOBS).
The FSA rules require all companies that sell PPI to act honest
and fair, to keep adequate records and gather sufficient
information to ensure that the insurance product is suitable for
the consumers needs. If any of these rules is breached, the
consumer will have the legal right to make a claim that the PPI was
mis-sold to them and if this is proven, the consumer will be
entitled to a refund of any PPI premiums they have paid.
Even though there are only a few FSA regulations which govern
the selling of PPI, there is a still a vast range of different ways
in which a salesman can breach these regulations and create a
mis-selling claim. Listed below are some of the most common grounds
for claiming for mis-sold PPI:
The salesman added the PPI to your loan, mortgage or other
credit product without your knowledge or permission;
- The insurance company said that you would not be approved for
credit if you did not purchase a PPI policy in addition to your
loan;
- The salesman didn't make it clear to you that you could
purchase PPI form a different insurance provider or at a later
stage and that you should shop around to ensure that you got the
best deal.
- The insurance company advised you to buy PPI when you were
already protected by life assurance or health insurance, and failed
to explain you wouldn't need PPI if you had these types of
insurance already;
- The salesman wrongly advised you to purchase a PPI policy which
was unsuitable for your needs because you did not satisfy the
policy requirements regarding your age, health, freedom from prior
illness, or weekly hours worked.
- The salesman failed to perform an adequate fact find and didn't
ask you about your financial circumstances, your commitments, your
level of indebtedness or any other insurances which you had in
place to protect your income.
- The salesman received a commission for selling you the PPI but
failed to mention this in the loan documentation, even if it was
mentioned in the sale conversation. Here the salesman has made an
illegal secret profit and the sale contract becomes invalid.
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