PPI Claims

ASA Upholds Complaint Against PPI Claims Management Company Ltd (Lion Claimline)

PPI Claims Management Company Ltd (trading as Lion Claimline) have recently been the cause of a complaint to the Advertising Standards Authority, the UK’s independent regulator for advertising.

The complaint was upheld and centred around the wording on a marketing email sent out by Lion Claimline. The full adjudication can be read here.

ASA adjudication against lion claimline

Screenshot from ASA website.

The issues concerning the complainant were two fold. Firstly, the company claimed in its marketing email that it only sends emails to people who’ve provided their permission to receive them but this was a claim that couldn’t be verified and was therefore considered misleading. And secondly, this therefore made the email unsolicited and therefore in breach of the CAP Code.

Lion Claimline claimed the email addresses came from a 3rd party lead provider. The ASA deemed this was still a breach and Lion Claimline have been advised that they must not send solicited emails again.

ASA Complaints Against PPI Claims Management Companies

Lion Claimline are far from the first PPI claims management company to have a complaint against their advertising practices upheld by the ASA. You can see 13 complaints (at the time of writing) about advertisers in the PPI space since 2010 here. 12 of those were fully upheld.

The complaints visible on the ASA website include multiple complaints about text messages claiming things like “We have your records and can see you are owed £3,250,” and so on.

All UK advertisers, not just those in the PPI claims space, are expected to adhere to the CAP codes that can be viewed on the official CAP website.

 

Big 4 Banks Set Aside Close to £20 Billion for PPI Payouts

Following an announcement from Barclays a few days ago that they’ve set aside an additional £900 million for the cost of PPI, the banking giant has now set aside £4.8 billion. But how much have the 4 major banks set aside in total to payout for the PPI mis-selling scandal.

  • Barclays – £4.8 billion
  • HSBC – £2.1 billion
  • Lloyds – £9.83 billion
  • Royal Bank of Scotland – £3.1 billion

The bill for Lloyds looks set to be almost as high as for the other 3 major banks all combined.

cost of PPI for big 4 banks

(Sources: Guardian and Financial Times).

This leaves the total pot put aside by the UK’s 4 biggest banks at £19.83 billion. Massive. And there’s no guarantee this figure won’t end up increasing over time.

 

FSA issues guidelines to lenders for mis-sold PPI letters

FSA PPI CCLsThe Financial Services Authority (FSA) has published recommendations for companies writing to customers who have been mis-sold payment protection insurance (PPI).

As some lenders have already started contacting customers to let them know they may have been mis-sold a PPI policy, the FSA has produced a set of guidelines detailing best practice for these firms.

As it is still at consultation stage, the guidance is not legally binding at present. Nevertheless, it outlines the regulator’s assessment of what PPI customer contact letters (CCLs) should contain, with a view to providing a framework for clear, fair and transparent communication between PPI providers and consumers.

You can download the full PDF here.

Background on the PPI mis-selling scandal

 

In November 2005, the FSA identified dishonest sales practices and a lack of compliance controls in the PPI industry. The FSA published a report on its findings and wrote to chief executives summarising the problems it had discovered.

In September and October 2006, a number of small firms were fined by the FSA for mis-selling PPI, and ‘enforcement procedures’ were served against 24 companies.

In January and February 2007, the FSA fined a number of major PPI providers for unfair treatment of customers, and the Office of Fair Trading (OFT) referred the issue to the Competition Commission.

Over the next 18 months, more PPI providers were fined, the Competition Commission published 2 papers detailing additional issues in the PPI market, and the Financial Ombudsman Service asked the FSA to investigate whether firms are dealing with PPI complaints satisfactorily.

In May 2009, the FSA banned the sale of single-premium PPI bundled with loans, and in September 2009, the FSA launched a consultation into how firms could handle PPI complaints better.

In October 2010, the banks sought a judicial review of the new rules, but the High Court ruled against them in April 2011. In May, the British Bankers’ Association confirmed it wouldn’t be appealing.

To date, over £2 billion has been paid out in compensation to victims of PPI mis-selling.

Context for the FSA’s latest intervention

In the second quarter of 2011, PPI providers were advised that they should begin sending customer contact letters (CCLs) to any victims of mis-selling, and were given 6 months to act on this advice.

The 6-month period has now ended, prompting the FSA to issue guidance on the content and presentation of CCLs.

Key points from the FSA’s guidance on PPI CCLs

PPI providers should contact all customers they believe may have been mis-sold PPI.

CCLs shouldn’t contain any marketing material or content that may distract from the key message.

Letters should indicate to customers that they have been mis-sold PPI, how this happened, that this may have caused them financial loss, and what steps they should take to resolve this.

Once customers have been contacted, their complaint will only remain valid for 3 years, after which they will no longer be able to claim compensation.

What does all this mean for consumers?

 

The Good

The fact that the FSA is advising PPI providers to contact potential victims of mis-selling is a positive step, as it means that customers may be alerted to the problem in cases where they would otherwise have been oblivious.

The FSA’s advice puts the onus on the industry to take responsibility for the problem, and aims to shift the emphasis back to fairness and accountability in a market where customers’ trust has been massively eroded in recent years.

The Bad

As things stand, PPI providers still have a long way to go before they regain the trust of consumers.

There is a possibility that, having made contact with customers directly, PPI providers may seek to settle cases as cheaply as possible. Some customers may accept settlements that are lower than what they’re entitled to because they don’t want to wait for the money or get into a protracted dispute with their bank.

Posted on in General.

PPI Claims Hit £1.9 Billion – But Billions Still Left to Claim!

PPI Claims have now hit £1.9 billion, as recently reported by the FSA. The rate at which claims were being made sped up dramatically towards the end of 2011, with a record pay out month in December, where £441 million was paid out.

 

PPI claims will undoubtedly have had a large impact on losses reported recently by Lloyds TSB.

 

However, reports in May 2011 suggested that claims were likely to reach £9 billion, suggesting that this could still only be the beginning of claims made against providers who mis-sold payment protection insurance policies for years.

 

A typical PPI claim results in around £2,750 in compensation, but there are widely reported cases of much higher claims successfully being made.

 

Sources

http://www.bbc.co.uk/news/business-17125141

Mis-Sold Payday Loans Claims – The Next PPI?

Will mis-sold payday loans claims become the next PPI claims?

Consumers who were mis-sold payment protection insurance policies have been making PPI claims for several years now. Providers have been widely criticised for the way the policies were sold.

However, one financial product coming under more recent scrutiny is the payday loan. Lenders like Wonga, Uncle Buck, Mr Lender and a host of others lend smaller sums of money to consumers just to ‘tide them over’ until their next pay packet. The loans typically range from £50 to £750 and the sum must be paid back on the consumer’s next payday.

In many cases, the representative APR on these loans is over 4000%. So, for example, if you borrow £400.00 with Wonga.com for 30 days, you would have to pay back £525.00, but failing to make a repayment for a year could leave you owing more than 40 times what you borrowed!! Martin Lewis of Moneysaving Expert wrote a witty, if not somewhat alarming post on how long it would take to amass the equivalent of the US National Debt after borrowing £100 from Wonga! That post garnered a lot of attention!

 

Could Mis-Sold Payday Loans Claims Realistically be Successful?

Realistically, in order for anybody to make mis-sold payday loans claim, they have to be able to prove they were mis-sold the loan. Payday loans companies are generally all very up front about the product, about the representative APR and about exactly how much will have to be repaid if you take the loan out.

With PPI, common complaints included not being told you had the product with your loan or credit card. That’s because PPI is effectively a cross sell from another product (a loan, mortgae or credit card). It’s different with Payday Loans. The payday loan is the product and the consumer is aware of the product, of the cost of the loan and of its terms.

So while finance bloggers and experts speculate on whether mis-sold payday loans claims, it only takes a quick glance at the websites of the biggest providers to see the lengths they go to in order to make their fees absolutely crystal clear to potential customers. Yes, they’re an expensive way to borrow money and yes, it’s very easy to find yourself amassing debts far higher than the value of the loan, but as long as consumers are made aware of what they are being sold and as long as the product remains legal, there is no mis-selling taking place.

Number of Fatalities at Work Increases

The Health and Safety Executive released statistics last week that highlighted a worrying growth in the number of people killed at work.

In the 12 months ending March 2011, 171 people were killed at work in the UK. That is an average of more than 3 people per week. The figure for the previous year was 147.

The 171 workplace fatalities spanned a number of industries:

  • 34 in agriculture
  • 27 in manufacturing
  • 50 in construction
  • 3 in gas and electricity supply
  • 10 in water supply, sewerage, waste and recycling
  • 47 in the broadly name ‘services.’

An injury at work does not need to be fatal to be serious, though. If you have had an accident at work, you may be entitled to make a claim. At Moneybright, we can help with workplace claims, however serious the injuries. Get in touch today to find out more.

100,000 PPI Complaints to Ombudsman in Last Year

Figures from the Financial Ombusman Service released recently confirmed that, in the last year alone, there were than 104,000 complaints to the financial Ombudsman about PPI (payment protection insurance).

The complaints are not unexpected, with consumers now being made more widely aware of their potential right to make PPI claims.

PPI claims can be made by those who were mis-sold the PPI policies in recent years. This mis-selling was widespread, often deliberate and undoubtedly at huge financial cost to consumers.

At Moneybright, we can help you to make PPI claims. If you’re not sure whether you could be eligible, get in touch today and find out how we could help.

Managing Money for Christmas

Christmas is notorious for the higher credit card bills. There’s so much demand on our finances between the presents, cards, decorations and supplies for the big day. But the last thing anyone wants when it comes to January is a financial hangover from Hell. So what can you do to stop that happening?

Start the Shopping NOW

Encouraging you to shop might seem like an “alternative” way to combat the credit card hangover! But if you start early, you can spread the cost of Christmas over multiple months, rather than putting the entire burden on your December pay packet.

Pen and Paper

You can’t beat lists! No, that’s not just an obsession I have with putting pen to paper to scribe these things – they genuinely do help. Write down EVERYTHING you are going to buy, ensuring you’ve not missed a single thing and, most importantly STICK TO IT!

Impulse purchases will result in a nasty financial hangover.

Compare Prices

We have no excuse now not to compare prices given just how easy comparison engines online have made it. You might not think that saving a couple of quid here and there will make all that much difference but it adds up, especially when you’re buying dozesn of presents.

Try Not to Resort to Plastic

Purchases on plastic will invariably end up costing more, what with interest and even potential penalty charges. If you can avoid it, do!

More Time to take PPI Claims to Ombudsman

The Financial Services Authority today given people more time to take their PPI claims to the Financial Ombudsman. Presently, anyone seeking to make a PPI claim has 6 months from the time their clami is dealt with by their bank or provider, to then refer it to the Financial Ombudsman. However, this temporary extension for PPI cases will last until 27th October 2010.

A consumer may only go to the Financial Ombudsman service after receiving a final letter from their bank and not being satisfied with the outcome. Anyone who received this final letter between 28th November 2009 and 28th April 2010.

This comes after consumers have complained about the way providers have been dealing with PPI claims. Banks rejected 60% of claims last year, however of the cases referred to the Ombudsman, 90% were settled in favour of the consumer.

It was recently reported that the PPI claims cases could cost the industry billions as a result of widespread mis-selling of Payment Protection Insurance policies in recent years.

Mortgage Lending Reached £9.2 Billion in February

The latest Council of Mortgage Lenders figures indicate that mortgage lending his £9.2 billion for the month of February 2010. The figures include both secured loans for residential property purchase and remortgages as well. £9.2 billion marks a 6% increase on January’s figure of £8.7 billion.

The Council of Mortgage Lenders acknowledges that an increase in lending throughout February, the shortest month of the year, is unusual. However, this can most likely be attributed to the fact that the end of the stamp duty holiday for properties valued between £125,000 and £175,000 had a considerable impact on the figures for January and February.

The figures are down on last year’s numbers but as the UK emerges from the recession, it is hoped that the market will recover and that mortgage finance will become more readily available.

According to figures from Nationwide, the average house value in the UK in February was £161,320.