Loan insurance compensation on the rise
by Luke Whitmore, 25th May 2011
The recent PPI mis-selling scandal is leading thousands of
consumers to make complaints to their banks, in the hope of
successfully reclaiming premiums they may have paid on expensive
and useless policies.
The banks recently suffered a crushing defeat in the courts,
after they brought a legal challenge against the Financial Services
Authority (FSA) in response to new regulations on PPI (Payment
Protection Insurance) mis-selling.
The new FSA rules established standards for PPI selling, but
controversially they also required lending institutions to
retroactively apply these rules, meaning that PPI sold when these
guidelines were not in place would nonetheless be regulated by
them. This was an attempt by the FSA to counteract the systemic
mis-selling of the loan insurance to people who did not need it,
did not ask for it and in many cases would never have been able to
successfully make a claim.
The British Bankers' Association, representing the banks, lost a
court case they brought against the FSA, and subsequently declared
that they would not be appealing the decision. This left the banks
in a situation whereby they have had to set aside billions of
pounds in order to ensure that they would be able to cover the PPI
compensation claims that they were now obligated to deal with.
PPI as a product is not inherently flawed, designed as it is to
ensure that borrowers are able to keep up the repayments on a loan
in the event that they should suffer any event which leads to a
loss of income - such as injury or unemployment. However, PPI
policies were often misrepresented, with brokers misrepresenting
the policies, failing to look into the financial and medical
backgrounds of borrowers, and in some cases even adding the
insurance onto the total loan cost without the customer's
consent.
The banks now face months or even years sifting through the
backlog of PPI complaints.
If you want to be sure that your PPI reclaim goes as swiftly and
efficiently as possible, we can help you claim back PPI.
Claims
Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010