De-Pressurising Payment Protection Insurance

QUESTION: How many people do you know who have at some point contacted a financial institution so they can apply for a loan or a mortgage or another type of finance?

ANSWER: Probably almost all of the people you know.

But how many of them also WANTED to apply for PPI, or payment protection insurance? The answer to this question is almost certainly next to none of them.

Yet, how many of them will have ended up with PPI? Yep, you’ve guessed it, most of them.

Why Do People End Up With PPI Cover?

Quite simply, because the banks and other financial institutions want them to, because it is profitable. They structure the sales process (or in some cases, used to) so that the “Financial Adviser” is paid more if they have sold the PPI to the customer.

Variations on this may include the sales person, sorry, erm, “Financial Adviser”, having to hit a target of sales before receiving any commissions, which could form a substantial part of his or her income. Weekly targets put the employee under constant pressure to keep selling what are, or were, effectively unwanted financial products to customers, or at the very least, mainly mis-sold financial products. This type of practice has been known to go so far that it was not uncommon even for bank counter staff to ask customers if they were interested in opening more accounts, or to apply for credit cards, or to take out PPI and a host of other very profitable (for the lender) financial products. Many employees who have had to do this found it somewhat demotivating, especially when they did not in the first instance apply for a job that involved selling. Incidentally, could this have had an effect on the current banking crisis where many of the people who work in and also run Britain’s banks do not now have a banking qualification – would you want to train as a banker just so you could sell?

What Benefit Do People Get Who Have Ended Up With PPI?

Another good question. How many people who take out PPI actually go through the process of making a claim i.e. if they ever experience loss of earnings and are then unable to meet the loan repayments? Probably about the same number as those who wanted to take PPI out in the first place, i.e. not very many.

How many of the people who do make a claim, actually manage to make a SUCCESSFUL CLAIM? Well, let’s just say that the numbers do not reflect favourably on the financial services industry.

So How Do People End Up With PPI Cover?

There are many techniques that were used to encourage borrowers to unwittingly inflict even greater financial hardship upon themselves. These were in many cases unfair and form the basis for claiming back your PPI payments, and possibly also the commission paid to the salesperson, from the lender. In short they were mis-sold.

How Do I Know If I Can Claim Back PPI Payments?

You can download a FREE checklist from ppi-ppi.co.uk to see if you are eligible to reclaim your premiums, which the majority of PPI policyholders are. Some of the more common failings include: you were not employed by another person or organization at the time, being pressured into the PPI, having to take out the PPI at the same time as the loan; being told the PPI increased your chances of getting the loan, not being given a choice to look elsewhere for PPI cover; being told it was compulsory; paying upfront; increasing your loan and PPI was raised too.

Mortgage Claims PPI

Have you taken out PPI on a Mortgage,  Car Loans, Home improvement loans, Secured Loans and even personal Loans. It doesn’t matter if the loan is current or previously redeemed.

If you have already tried to claim and been refused by your lender it doesn’t matter. You will be taken much more seriously if you use a professional service.

It doesn’t matter if you win or lose (which is unlikely). You pay no fees to make a claim. Research now shows that up to 90% of policies sold in the UK are useless. Many people when trying to claim on their PPI are told that they are not eligible to make a claim on these policies.

It is estimated that over 20 million people in the UK have been mis-sold a payment protection policy, some might not know they even have one. Recent changes in the consumer credit act has forced companies to issue at the very least, annual financial statements. If you have never recei ved a financial statement from your lender then chances are you have no idea how much you actually owe.

The sale of Single Premium Payment Protection Policies, insurance to your loan in one lump sum, has recently been BANNED at the point of taking out the loan. If you have one of these policies then chances are it was mis -sold and you are paying for something in which you will never likely be able to make a claim on.

Mis-selling checklist

1. Were you told the policy was compulsory?
2. You were told the insurance was essential for you to get the loan
3. Where you asked if you had another policy or insurance in place that would cover you?
4. The terms & conditions of the loan insurance policy were not fully explained to you.
5. You felt under pressure to take out the loan insurance
6. Where you informed that alternative and cheaper insurance products were available to you?
7. Did the adviser tell you about any significant exclusions under the policy – for example, the exclusion that says you won’t be covered for any pre-existing medical condition?
8. If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance up front in one single payment?
9. If you had to pay for the PPI as a single payment, did the adviser make it clear that the insurance cost would be added to the loan and you would be paying interest on it?
10. Single premium PPI insurance normally lasts for 5 years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium, even after the insurance expired.
11. You were under 18 or over 65
12. You worked less than 16 hours a week
13. You were employed on a temporary or contract basis or were aware you may become unemployed
14. You suffered from stress, backache or had a pre-existing illness or injury
15. You were not told about the true cost of the insurance, (or not told you were buying it at all).
16. You were not asked about any other insurances you had
17. You were not told that the same policy could potentially be bought elsewhere cheaper.
18. You paid for loan insurance upfront and it was not refunded to you when you paid back your loan early.

If any of the above apply to you why not claim back your ppi premiums now? You could receive thousands of pounds back.

If you still need PPI you can shop around and buy it cheaper elsewhere ……………..and read the small print and exclusions first!

Is it Worth Claiming Unenforceability?

Is it worth having a look at your mortgage agreement to see if it is unfair or even unenforceable?

There are several companies who offer the service of taking a look at your mortgage to see if it is unfair or unenforceable. There are many reasons given why a mortgage agreement might be unfair and these differ from company to company. The best advice is to gather as much information as possible from as many firms offering the mortgage claim service.

The fees charged also vary from company to company so shop around on price.  Don’t pay anything until you are sure you have a case. Companies are willing to take money before they have even seen the agreement or mortgage offer.

You or your mortgage claim company will need to ask your lender for your full agreement records including your mortgage offer and all records relating to your mortgage. The will send what is called a ‘Subject Access Request’ or SAR which will cost you £10.00. This is normal.  When this has been assessed the company will be in a position to tell you if you have a mortgage claim or not.

You have to be patient. It will take years………..yes years before you may see a result.  The law is always changing and when cases reach court new laws are made so you can never be sure what will happen in the long term.

Be prepared, shop around and be patient.

Mortgage Claims For Unenforceability?

Were you mis-sold a mortgage?

Was it difficult to keep up your repayments or impossible to understand the mortgage that you took out?

A hugely important choice must be made right at the start. Everything must be done to ensure that you are offered the mortgage that is right for you by a qualified advisor (CeMAP) who must, by law, treat customers fairly.

On 1st November 2004, the sale of mortgages became regulated by the FSA under a strict set of rules called the Mortgage Code of Business (MCOB). This code detailed a strict process for the mortgage sale. Following regulation there have been many breaches of MCOB which have related to the numerous reasons for mis-sold mortgages. These include large fines for inadequate record keeping, the sale of self-certification mortgages, in particular to employed applicants has been recognised as a significant problem.

There are a number of circumstances that can constitute a mis-sold mortgage. Please consider some of the points below as you may have been mis-sold your mortgage.

Were You?

• Questioned to ascertain all the key facts about your mortgage application
• Offered a choice of mortgage products
• Offered Self Certification Mortgage when employed or self employed
• Told that you only qualified for a sub-prime mortgage
• Advised the mortgage end date went past your retirement age
• Offered PPI on your mortgage or loan
• Were you told to apply to a particular lender for “speed”.

Any of the above circumstances if incorrectly advised may constitute a mis-sold mortgage.

Brokers often used mortgage packagers who carried out credit reference agency (CRA)checks to advise the brokers on product selection for applicants. This process has also resulted in breaches of the Data Protection Act.  Also wrong products were recommended from a limited selection of lenders.

Lenders who may have mis-sold mortgages

Mortgage lenders, including: Accord, Advantage, Mortgages PLC, Kensington, GMAC, GE, Platform, Preferred, Rooftop and Future Mortgages are all examples of sub-prime and specialist lenders.  Others such as Northern Rock and Bristol and West are also lenders who may have mis-sold you a mortgage.

Mis-sold mortgages have affected thousands of borrowers in the UK. The Financial Services Authority (FSA) has expressed concern; it has fined several lenders and mortgage brokers for not Treating Customer Fairly (TCF). This is not just restricted to Sub-Prime mortgages and loans, it may also apply to all other types, these include Buy to Let, Right to Buy, Purchases and Remortgages.