Making A PPI Claim - Be Careful!
If a consumer makes a PPI refund claim, be careful. Whislt we welcome consumers claiming back their PPI claims themselves, a word of caution about the possible under settlements of PPI claims. At PPI claims back solicitors our Principal Solicitor says:-
“ I am still taken by surprise how lenders treat borrowers and Solicitors with PPI claims. I often get lenders wishing to deal with our clients direct and by passing their chosen professional advisor. In one case, our client was sold a PPI policy worth over £15,000. The claim was denied by the Lender and the matter is with the Ombudsman pending possible court action. However the lender decided to call our clients to make an offer as a goodwill gesture. They offered a nominal £1000, take it or leave it. My client was unhappy and upset and contacted me. If this is how some lenders deal with Solicitors, it begs the question how fairly they are treating borrowers without professional representation.”
PPI Claim back solicitor put an end to this practice by the PPI lender. A very sorry affair.
It is all very well the Financial Ombudsman and others saying that they should take the PPI claim on themselves but for many, borrowers who were mis-sold PPI are not always able to make a PPI claim for various reasons. When the lender deals with the borrower direct, who is to say that what they offer is the full and correct amount? How does the borrow know unless they are particularly informed about their full losses, past, present and future? To be mis-sold PPI in the first place only be short-changed when making a PPI claim is simply rubbing salt into the wound.
Got Your PPI Money Back – What About The New Loan Agreement?
Furthermore we have had many settlements following claiming back the PPI policy where the Client has been asked to sign a new loan agreement. This new agreement has to be considered carefully to ensure there are no errors so that borrowers are not financially disadvantaged. Many PPI clients were represent are not very good a figures in the first place and need help from qualified solicitors.
Fight Back and Put In Your PPI Claim
Mr Ronnie Hutcheon of R James Hutcheon Solicitors confirms that whether you proceed with claiming back your PPI yourself or through Solicitors the most important thing is to make that PPI claim.
Never Pay Up Front Fees
A further word of caution is that you should never pay an upfront fee you instruct a third party. As solicitors we never charge an up front fee for loans which are sold with PPI.
Should There Be A Ban of PPI Sales?
The Competition Commission has recommended a ban on the Sale of payment protection policies (PPI) when sold with a loan at the point of sale. This ban is to stop the wide spread mis-selling of the PPI policies by lenders. One of the reason for the mis-selling of the PPI policies are commissions. In addition as lenders add the cost of the policy on top of the loan, the borrower has to pay interest on it making it a very expensive insurance product.
Our Principal Solicitor, Ronnie Hutcheon who specialises in the sale of PPI claims has welcomed the ban on the sale of PPI policies. He says:
“A ban at the point of sale will help prevent a conflict of interest with the lender wishing to gain more profit at the expense of their customer who ultimately pays for this product.”
Mr Ronnie Hutcheon a Solicitor in the Firm of R James Hutcheon Solicitors specialising in PPI claims confirms that PPI policies are a good product to have but only if sold correctly and at the right price without large commissions. “
My experience has taught me that where there are large commissions payable for a financial product, that product is generally mis-sold. Just look at the endowment and pension fiasco. The PPI mis-selling has a similar history. The financial and insurance industry certainly needs to look at itself and lean from the past.
Financial Ombudsman Service (PPI Claims)
In the year ending March 2010 the Financial Ombudsman Service (FOS) dealt with over 49,000 PPI claims. A high volume of the cases involved a single premium PPI added to the loan.
In total, the FOS resolved 166,321 disputes in the period covered by the report and consumers were compensated in around 50% of cases.
It has been reported by FOS recently that consumers should not use Claims Management Companies (CMCs) due to false promises of success and taking a large chunk of any compensation awarded.
Whatever the decision the consumer makes, the most important thing is to make a PPI claim. It is important to note that R James Hutcheon Solicitors are not a CMC. We have very different Regulators. As Solicitors we are qualified, and have a duty to act in our clients best interest at all times to deal with client fairly and properly. Many clients are seeking help and assistance to claim back PPI policies that have been mis-sold and we are claiming Thousands of pounds back for mis-sold PPI. In one case we recovered over £26,000. That is a significant amount on any personal loan.
More Time For New PPI Claims
More time has been given for 55,000 people to complain about being mis-sold payment protection insurance (PPI). The Financial Services Authority has extended the normal six-month deadline for people to go to the Financial Ombudsman Service (FOS) if a firm turns down their original complaint.
The temporary rule benefits those whose complaints were first rejected between 28 November 2009 and 28 April 2010. The FSA said the measure was being put in place so that potential complainants were not disadvantaged by a delay in the regulator’s own plans to revamp the way firms are obliged to deal with new PPI complaints.
Mis-selling of PPI, which is supposed to help people meet their loan repayments if they fall ill or lose their jobs, is currently the biggest source of unresolved problems in the financial services industry.
The FOS reported recently that they accounted for 30% of all the new complaints it dealt with in 2009-10. In September 2009, the FSA decided to get tough, ordering banks and other sellers of PPI to reopen previously rejected complaints about mis-selling of the insurance, which it now thinks could number about 500,000.
It also told firms to improve the way they dealt with new complaints. However, implementation of its plans has been delayed because of the many objections sent in by lenders, brokers and other sellers of PPI, which are now being considered by the FSA’s staff.
The regulator still hopes to have a new set of industry rules in place by the end of this summer. But in the meantime, it wants to ensure that all those whose complaints had been rejected by firms since the end of last November will be encouraged to go to the FOS if they want to complain further.
New Ombudsman: We need to resolve PPI complaints faster
Ombudsmen, like policemen, seem to be getting younger these days. Two months ago, Natalie Ceeney took up the role of the nation’s chief financial ombudsman, stepping into the well-worn, outsized shoes of Walter Merricks – who had held this role since the service was started 10 years ago.
Unlike him, she does not have a legal background and has never previously worked in financial services. But, with the breezy confidence exhibited by many former management consultants, she insists that this isn’t necessarily a disadvantage.
A quick glance at her CV shows that despite still being under 40 she has held a number of senior posts, from heading up the National Archives, to the director of operations at the British Library. So how is she hoping that these roles will help her, when it comes to adjudicating on complex critical illness insurance claims or whether someone was mis-sold a payment protection plan?
She says that as chief executive, as well as chief ombudsman, her role is largely to influence policy and shape the structure of this organisation.
“It doesn’t matter whether you are running a library, a hospital or the Financial Ombudsman Service (FOS). What people who use that service want is excellent service levels and that’s something I’ve always prided myself on improving.”
She points out that it isn’t her job to personally rake through every complaint received by the FOS, although some people who use the service seem to assume this is the case. “In the last 10 years my predecessor only personally adjudicated on three separate cases.”
But while most decisions will lie with the “expert team of ombudsmen” – each of whom focus on specific product areas – she says that as the chief ombudsman she will be involved in the contentious and “big decisions”.
Last week the ombudsman published its annual report, and the figures show that the volume of cases dealt with continue to soar. It ruled on about 166,000 cases – a 46pc increase on the year before. In total, the FOS receives almost one million inquiries.
Not surprising, the largest bone of contention at present is payment protection insurance, and about three in every 10 complaints are about these insurance policies that are sold alongside loans and credit cards. And there is clearly some frustration – although she refuses to name names – as to why many companies aren’t resolving these themselves, rather than letting them get to the FOS.
There are also increasing complaints about financial hardship, unsecured loans and debt collection agencies.
Ms Ceeney says that one of her main tasks is to ensure that the organisation evolves so it can operate efficiently on this scale. “If you go back 10 years we were set up as a small organisation dealing with 25,000 cases a year. This year we are expecting 200,000 cases. We need to continue modernising, improve our technology and reduce the time it takes to handle some of these cases.”
One of the biggest complaints about the service is how long it can take for cases to be settled. Improvements have been made in recent years, but many people still wait months for a judgement.
Ms Ceeney says two-thirds of claims are settled within six months, but admits that this could be improved. “By the time people come to us they have invariably been in one complaints loop or another for quite some time.” She wants a far greater proportion of claims settled within six months, and a significant proportion of these dealt with far quicker than this.
“There are always going to be a handful of complex cases that are going to take a long time to resolve, but many could be done quicker.”
She says new technology may help. “We’d like to see systems in place so people could track where their claim is, and how long it is likely to take. If the Royal Mail can do it with parcels, we should be able to do it with complaints.”
Few anticipated such a huge rise in PPI claims and although the FOS says it “expects” the number of PPI complaints to dip this year, there are no signs of this at present. “If anything, the number of complaints on this issue are speeding up, not slowing down,” Ms Ceeney says.
The FOS is also readying itself for any increase in travel insurance complaints, following the recent travel chaos caused by volcanic ash. “We don’t know whether this will be an issue yet,” she says. “Customers have to register any complaint with their product provider, and they have eight weeks to resolve the problem. Only after this can it be referred to us.”
She adds that this situation has been further complicated by consumers not knowing where to get refunds: airlines, travel insurers or credit card companies.
Looking at a longer time-frame, Ms Ceeney has also expressed concerns about interest-only mortgages, many of which were sold 10 to 15 years ago.
“People sometimes misunderstand this interest-only deal and may not realise they don’t have a repayment vehicle to pay off the debt. Our worry is in 10 years we may see a flood of complaints unless lenders warn borrowers now.”
Although Ms Ceeney is guarded about criticising individual firms, or even sectors within the financial services, there is clearly some concern about the volume of complaints now received from claims management companies.
About 80pc of all PPI claims now come from these companies – who will take a proportion (often as high as 40pc) of any payment received.
“We don’t object to people hiring someone to manage their claim,” Ms Ceeney says, ”but we want to make it clear that they do not need to and this won’t improve their chances of getting a ruling in their favour. There is no trick these companies use to ensure a complaint is upheld.
“The FOS was set up as an approachable, inexpensive alternative to the courts. People don’t need to know legal or financial jargon to lodge a claim, and all will be dealt with impartially. A lot may have changed in 10 years, but that certainly hasn’t.”
