Claims

PPI Claims continue to be a big deal in world of financial claims. But on what grounds are people making the claims? Essentially, PPI claims are being made where someone was mis-sold the policy. If you’re not sure whether or not you were mis-sold a PPI policy, here are just ten circumstances that would count for misselling.

1. You were not told at the time you took out the policy that the same policy could be available at a better price elsewhere.

2. You were employed on a temporary or contract basis at the time you took out the PPI policy.

3. You were working fewer than 16 hours per week at the time you took out the policy.

4. The lender failed to ask you about any other insurance you already had.

5. You had existing problems with stress or suffered from back ache.

6. You were told that you had to have PPI in order to take out the loan or card.

7. You were not even told about the insurance and it was just added!

8. You had some form of existing illness.

9. You were under 18 or over 65 at the time the loan was taken out.

10. You were self employed at the time the PPI policy was taken out.

These are just ten situations in which you would be considered certainly to have been mis-sold your PPI policy and should enquire about making a PPI claim.

PPI claims amount to money that you should never have been paying in the first place. If you have been mis sold a policy, PPI claims are a means of getting back money you are owed!

There have been a number of  ‘mixed signals’ of late in terms of unenforceable credit agreement. On the one hand we have emerging success stories of people having their debt wiped out because the lender made an error in the original agreement and on the other hand we have events like last week’s at the Manchester High Court. The ruling last week stated that creditors do not have to still possess the original credit agreement, but that a ‘true copy’ is acceptable. This ontradicts a number of the claims by the companies at the forefront of the unenforceable credit agreement claims and throws even more confusion into whether or not unenforceable credit agreement claims really can wipe out certain debts.

In order to clarify the situation somewhat, the Office of Fair Trading is set to release clear guidelines on the matter, due out by the end of January 2010.

Essentially, the way that most Claims Management companies handling these cases are advertising them, is as being able to eradicate debts owing to a loophole in Section 78 of the Consumer Credit Act. This states that unless a true copy of the original credit agreement can be supplied within 12 days of such a request by the debtor, that the debt is unenforceable. But the debt is only deemed unenforceable until such an agreement can be produced. This means that some people have successfully had their debts written off owing to creditors being unable to produce such a copy.

Some other unenforceable credit agreements have been the result of omissions or mistakes in the original agreement.

While unenforceable credit agreements are certainly something I believe should be pursued if there is a genuine error on the part of the lender, the guidance is limited and there is significant confusion surrounding the issue at present. The guidelines will be welcomed by consumers and the creditindustry alike.

We’re not all as organised as we should be when it comes to keeping our papers organised. I’m guilty of leaving bank statements stuffed in drawers and receipts lying around the house. I know, I know… bad habits!

But disorganisation doesn’t make you any less entitled to make a PPI reclaim if you believe you were missold your policy. PPI claims came about as a result of the policies being missold by lending institutions and as this is a fault of the lenders (not yours) you are perfectly entitled to find out whether or not you could make a claim, irrespective of whether you still have the paperwork associated.

If you are considering a PPI reclaim and don’t have the papers, write to your lender specifically requesting a breakdown of the associated account. Make specific mention to the fact that you are particularly interested in the PPI element of the account. It’s worth noting, however, that your lender is only obliged to keep paperwork on file for 6 years after the end of the agreement. So if you finished paying back on that account more than 6 years ago, your lender may not have the records and pursuiing a PPI reclaim is unlikely to yield results for you.

If, however, it has been less than 6 years since you completed your repayments, your lender is obliged to still have the paper work andunder data protection laws has 40 days from the date of receiving your letter to respond to your request with the appropriate information you require.

Getting hold of your paperwork should be a priority matter if you are considering a PPI reclaim.

Following a disappoint bank charges verdict back in November, during which the Supreme Court overruled the decision of the High Court and Appeals Court that the OFT could assess the fairness of bank charges, consumers have been dealt another blow. The OFT decided to take some time following the disappointing Supreme Court hearing to assess what their next step would be. Despite hints by the Supreme Court that the charges could be challenged under another area of law, the OFT announced this morning that it will not be challenging further.

MoneySavingExpert.com, with the help of a QC compiled information this month that they believe opens up another legal avenue for challenging the fees. However, the OFT said this morning that while they had considered going forward under the Consumer Credit Act but believed it to be more appropriate for individuals to take their own individual cases to court.

What this unfortunately means is that two and a half years of work by the OFT has ended in defeat, with the banks essentially, as things stand, free to charge what they like. The OFT did address its concerns for the lack of transparency in bank charges and said it hopes to come to some voluntary arrangement with the banks over them.

Consumers will be disappointed. However, it is largely thought that one successful case brought to the courts by an individual will set a precedence for other cases.

Last month, the Supreme Court overturned the decisions of both the High Court and the Appeal Court and ruled that the OFT is not authorised to assess the fairness of bank charges. This bank charges verdict came as a huge shock and disappointment to millions of consumers who thought they might be able to have the excessive charges refunded.

However, moneysavingexpert.com Guru, Martin Lewis, has been working with legal experts since the ruling in November. The Supreme Court seemed to almost hint that there might be other legislation under which the charges might be disputed and it’s this little flicker of hope that has led Lewis and the legal team to their newest campaign. They now believe that millions could claim bank charges back if the OFT launch another campaign to have bank charges deemed unfair under the Consumer Credit Act.

The Office of Fair Trading has yet to release an official response to the new legal findings. As things stand, there are an estimated 1 million bank charges claims on hold. If the bank charges are found, through whatever legislation, to be unfair and the banks are forced to refund them, it will cost them an estimated £10 billion.

As illustrated on the bank charges timeline the charges ‘scandal’ has been ongoing now since 2005 and it doesn’t look like there’s an end in sight just yet!

In an immensely unexpected decision, the Supreme Court has overturned the decision by the High Court and Appeals Court in the ongoing bank charges claims case. The ruling means that Office of Fair Trading has been deemed NOT to be able to make an assessment over the fairness of charges.

This will come as a bitter blow to the one million consumers whose claims have been on hold since July 2007 and will be disappointing to an estimated 8 million others who have incurred charges over the past 8 years.

This does not necessarily mean that people are unable to claim bank charges. It means that the Office of Fair Trading does not have the authority to insist that banks refund them. This in turn means that any consumer wishing to pursue a bank charges claim will have to take their individual case to the courts. Most experts had previously expected the Supreme Court to uphold the decisions of the High Court and Appeals Court.

Marc Gander of the Consumer Action Group, the lobbying group behind the campaign, said, ‘We are totally stunned and I think the banks themselves must be stunned. I am sure this isn’t the end of the issue and the OFT will pursue the issue further in the European courts. The charges are excessive and cannot be allowed to persist.’

Whichever way the ruling went, it was likely that the case would continue through the European Courts. So in terms of when the case will be wrapped up, the ruling will probably make little difference. The impact it has had, however, is to dash the hopes of millions of consumers who have incurred excessive banking charges since 2001.

Consumer support group, Which? estimates that a further 8 million Britons will reclaim unfair bank charges if the ruling expected on Wednesday this week goes in favour of the Office of Fair Trading.

Claiming bank charges has been suspended since July 2007, following a joint decision by the Office of Fair Trading and the banks to run a test case through the courts. One High Court date, an Appeals Court date, a three day House of Lords hearing and over two years later and the Supreme Court is now just two days away from making a decision with the potential to change personal banking entirely.

There are already a million applications for bank charge reclaims on hold pending a decision. Prior to the suspension, it is estimated that the banks had already reimbursed almost £1 billion to consumers who had claimed back the unfair bank charges.

But Which? now estimates that another 8 million consumers will follow suit if the Supreme Court upholds the ruling made by both the High Court and Appeals Court. If that happens, consumers will be able to claim back bank charges from the past 8 years. While this is undoubtedly good news for those who have been hit by the charges, it does raise questions about the future of free banking. There are concerns that banks may start charging a monthly fee for a personal bank account or even start charging for every single ATM transaction. This will be a huge blow for those who enjoy free banking without ever going into the red, however, last week Santander, the owners of Abbey introduced a completely fee free account for holders of their mortgages. Could this open the door for the other banks to follow?

Up until 2005, bank charges for unauthorised overdrafts, bounced cheques or failed payments were simply an accepted part of life. But over the past four years, questions have surfaced about the legitimacy of such charges and the final result of the ongoing battle between the banks and Office of Fair Trading could completely change personal banking. Here’s the story so far:

2005: Over the course of the year, some banks raise their unauthorised overdraft charges by almost 50%, taking them to £38 each. A number of customers began to vocalise their questions and concerns over the fairness of such a charge. Some early private reclaims succeed.

OCTOBER 2005: The Daily Mail publishes a series of articles highlighting the issue in its popular Money section.

FEBRUARY 2006: Stephen Hone and the organisation, ‘SAFE’ (Struggle Against Financial Exploitation) protest bank charges at the Office of Fair trading.

MARCH 2006: News reports detailing successful reclaims are published.

APRIL 2006: The Office of Fair Trading publishes a report into Credit Card Default Fees. The report states that some credit card providers are charging unfair fees for defaulting.

MAY 2006: ITV broadcast a programme on ITV1 Tonight about reclaiming bank charges.

LATE 2006 AND EARLY 2007: Bank charge reclaim template letters appear on various finance forums online, prompting even more individuals to reclaim their charges, many of them successfully so. Most banks repay charges without argument, some go to court. Only two cases in court ever go in favour of the banks and many experts argue that this was because of poorly arranged cases by claimants.

MID 2007: The total already handed back by the banks is estimated to be in the region of £1 billion. 2 banks refuse to disclose the amount they have refunded.

JULY 2007: The bank charges reclaims have overwhelmed the courts and the Office of Fair Trading. The OFT announces that it will take seven banks and one building society to court over the bank charges, to clarify with absolute certainty the legitimacy of such fees.

JULY 2007: The Financial Services Authority grants a waiver to the banks. This means that all claims are suspended until the OFT test case in the courts is completed.

SEPTEMBER 2007: A number of banks reduce their bank charges.

JANUARY 2008: The Office of Fair Trading High Court Case commences.

APRIL 2008: In something of a consumer victory, the judge presiding over the case deems that, while bank charges cannot be judged under common law, the OFT DOES have the power to decide whether the charges are fair.

MAY 2008: The banks appeal the judgement but are told that their appeal must not extend beyond the end of 2008.

OCTOBER 2008: The appeal hearing begins.

FEBRUARY 2009: The High Court rules in favour of the Office of Fair Trading.

APRIL 2009: The banks obtain permission from the House of Lords to appeal the decision again.

JUNE 2009: A three day hearing with the banks and OFT present takes place at the House of Lords. The five judges are expected to deliver a final verdict in Autumn 2009.

NOVEMBER 2009: In a hugely unexpected turn of events, the Supreme Court overturns the decision by the High Court and Appeals Court and judges that the Office of Fair Trading cannot assess the fairness of bank charges. Consumers await an announcement by the Office of Fair Trading about whether they will appeal through the European Courts.

DECEMBER 2009: The OFT announce that they will not continue a legal battle against the banks. This is a huge blow for consumers, though legal experts reiterate that consumers can still take their own individual cases to court.

The long awaited Supreme Court decision on unfair bank charges will finally be made next week. The judges will decide whether or not the Office of Fair Trading has the power to assess the fairness of bank charges. Both the Appeal Court and the High Court have already previously judged that the OFT does have such powers and the step up to the  new Supreme Court was brought about by banks still fighting that decision. Realistically, however, it could still be a long time before consumers find out whether they have a right to reclaim such charges.

The applications for reclaims were suspended in July 2007, when the banks and the Office of Fair Trading agreed to stage a test case. Prior to this though, around £1 billion was refunded by the banks to individuals claiming bank charges and there are currently almost one million claims on hold awaiting a decision.

Martin Lewis of Money Saving Expert has warned that even if the Supreme Court Rules that the OFT does have the power to assess bank charges, the banks could continue to fight and ‘drag this out for years,’ unless there is some political intervention.

In a three day appeal hearing at the House of Lords in June 2009, the seven banks and one building society in question argued that upholding the OFT right to regulate bank charges would lead to a ‘deluge of litigation.’

The final Supreme Court Decision is expected at 9.45am on Wednesday 25^th November.