Posted on 27 May 2009
Top 6 PPI Mis-Selling PPI Claims
We have listed below the most common complaints by our clients against lenders for the mis-selling of PPI policies:
1. Pressurised Sales
The sales advisor tells the borrower that without the PPI they are unlikely to obtain the loan due to their credit history or something else which may go against them if they do not take out the PPI. This type of pressurised sale is one of the most common techniques used. It must be remembered that PPI policies should be optional.
2. Assumptive Sales
Our clients experience are such that the PPI was on an “assumptive sale” that is, the PPI sold by the lender “assumed” that the borrowers wanted PPI rather whether it was suitable for them. To sell any PPI policy the lender must investigate whether the borrower really does need the PPI policy and establish any existing cover through insurance or employment.
3. Failure to Ask About Pre-Existing Medical Conditions
All PPI policies contain small print that exclude pre-existing medical conditions. The sales advisor often fails to investigate and ask the right questions to ensure that the borrower would be eligible for the PPI. Any pre-existing condition would bar any claim and make the PPI worthless.
4. Failure to Establish Existing PPI or Cover
Often the sales advisor does not ask the right questions on whether the borrower has any exiting PPI or existing similar cover which could be available through other insurance policies the borrower may have or through his/her employment. For instance the employer’s contract may pay the borrower his/her wages in full or in part for 6 months if they are off work due to illness. Should this be the case a careful analysis has to be considered to see if the PPI is suitable.
5. Did not Know About PPI
In a fair proportion of cases the sales advisor did not even tell the borrower about the PPI. The PPI cost was simply added to the loan without any knowledge. Should this be the case we will assume that the PPI was compulsory and therefore there is a chance that the loan could be written-off as well as a full refund of the PPI premiums paid.
6. Re-Selling PPI on Second Loans
There are other cases where our clients have been contacted by lenders to sell them a second loan. The second loan was then used to pay of the first loan (including the PPI) and then they have been sold PPI again. The PPI policy is “re-sold” or “churned” which in such circumstances are not fair to the borrower. The cost of the PPI in all loans sold in this way can be reclaimed or refunded and in certain cases have both loans written off in full.
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R James Hutcheon Solicitors
The Heath Business & Technology Park
Runcorn
Cheshire
WA7 4QX
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