THE PPI QUESTIONNAIRE
The PPI Questionnaire – For over 10 years I have been concerned about the emphasis put on clients to complete an application for PPI mis-selling themselves.
Various Welfare Rights Organisations, Financial Advice Organisations, Newspapers and certainly the Banks themselves encourage the consumer to deal with the cases themselves.
We have seen on occasion what has happened when Organisations accused of mis-selling are allowed to be the Judge & Jury of their cases. It is sometimes not a nice place for the consumer i.e. fines imposed when the Lloyds Group delayed payment; fines imposed on Lloyds and Clydesdale for not providing data; the re-investigation of numerous cases where the correct data was not revealed or the financial calculation was not correct.
I have said that a considerable amount of our population, whether in Scotland or the whole of the UK, can if they wish complete the PPI Questionnaire application themselves. We have clients that are businessmen or women, who are simply busy and do not wish to deal with the paperwork. We have clients, who simply do not trust Banks. More importantly we have clients who are not citizens who have benefited from the best of education and have a considerable difficulty not only lodging the intimation, not understanding any refusals but more particular in completing the PPI Questionnaire.
The PPI Questionnaire may vary slightly but in general the PPI Questionnaire is the approved version which you would receive and download from the Ombudsman Service. There are areas in this agreement which baffle me. They baffle me as I cannot understand why they are in the Questionnaire. The only reason I can have is that they put off the consumer. Surely I am mistaken!!!
I refer in particular to Section “C”, a Section which appears to have been approved by the previous FSA, now Financial Regulation Authority and certainly at least by the Ombudsman who produces the same. It is in my opinion a completely off putting document to many a consumer. A document that frankly saves money for the Banks and Financial Institutions which should be paid as legitimate compensation to consumers.
Section “C” is divided into four sections – C1, C2, C3 and C4.
The first question in C1 is fairly straightforward. They ask what product the consumer bought the Payment Protection Insurance to cover. The answers to these are such as a personal loan, credit card etc. Not an unreasonable question.
They then ask what the account number was. In many respects that is not an unreasonable question. However, if consumers are aware that they obtained a loan say some 10 years ago and there was a lump sum PPI many consumers do not retain the paperwork. They do not know where to obtain the same and how to obtain it. There is no hint, guidance or direction to the consumer to find out that information. Indeed, without such hint, guidance or direction many a consumer may well look at the document, look for some paperwork which they can’t find and then simply give up. This is not what a consumer should be doing.
Matters however get worse for the consumer. By the consumer I am not simply talking about citizens who have good employment and well educated. I am talking about citizens who although they may be in employment and certainly should have been to obtain finance or credit, who have not had the benefit of the best education and as many in our Society and by that I mean many millions not good with paperwork.
The next Section C2 asks what the reason was for borrowing the money or taking out the credit. That may not be easy if a product was taken out 10 years ago by consumers who have been the victims of modern consumer society in that they have taken out various credit cards and loans to pay off credit card, loans etc., have some difficulty recalling why they took out the loan.
We then come to the two complete bug bears, which in my opinion should never be in the PPI Questionnaire, are close to inappropriate to being in the PPI Questionnaire and in my humble opinion have saved Banks and Financial Institutions millions if not billions of pounds. The scenario is quite simple. The consumer receives the Form. They struggle through to Section C3 and C4, leave the paperwork while they reconsider the same, do the same over a few weeks and then simply do not return it. They effectively give up.
C3 asks “IF YOU BORROWED THE MONEY TO PAY OFF OTHER DEBTS, PLEASE TELL US MORE ABOUT THOSE DEBTS?”.
On the one hand there is a sense in this question as many consumers borrowed money to pay off debts. They regularly did so and hence the chances of a lump sum PPI remaining without being paid off early (without a pro rata rebate) was remote. However, you think about a loan you may have taken out in say 2003. Can you reasonably remember at that time not only why you took out the loan but if you took the loan to pay other credit card loans, who they were? how much was owed? when they were taken out? and when they were paid off? This question verges on the impossible. In practical terms some of us retain paperwork all our days. Accordingly, some of us (and not that considerable a number) have that information. How many others would look at that question with bewilderment, try and think about what they had at the time and try and think of who they paid off. Again, we are talking about prejudice to the more naïve and stressed consumers in this world. Clients who unfortunately either hit a debt spiral and used card to pay off card, loan to pay off loan, or to put it more simply people who are products of the consumer society who borrowed to obtain the fridge freezer, 40” television, new car or whatever was the norm.
What makes this clause totally incredible is that the Banks/Financial Institutions should have that information. The easiest and safest answer is to say “YOU HAVE THIS INFORMATION IN YOUR FILE”. It is entirely true. At the time a loan, credit card or mortgage was taken the Financial Institution could, should and ought to have searched all these details. They should have a note of all the loans or cards that were due to be repaid. On some occasions where there was a loan there was a specific direction that previous cards/loans be repaid and on some occasions the Lenders actually paid them themselves.
How many people, who are not best organised, educated and who are not good with finances would have recalled all that information. Very few. This is a benefit for the shareholders of the Financial Institutions – a negative for the consumer.
We then come across the most ridiculous clause – Section C4 which states “HAVE YOU EVER MISSED PAYMENTS – OR GONE INTO ARREARS – ON THE LOAN OR CREDIT YOU LISTED IN QUESTION C.1”.
The simple answer for those who can budget well is “no”. However, yet again, as we are well aware in the consumer society we live in where the Trust Deed or Insolvency or Sequestration is not uncommon, particularly due to the “credit crunch”, many people would have gone into such arrears.
Why is this question asked?
It is not asked for any good reason. The Bank or Financial Institution does of course have that information. The Bank or Financial Institution sold the product. If it is a Bank they will know whether the loan, credit card or mortgage was in arrears. If a Broker was responsible for introducing the business they can obtain this easily from the Financial Institution.
To ask how many times a payment had been missed as is indicated in Section C.4 is a ridiculous off putting question.
Can you imagine Mr and Mrs Smith sitting in the house having legitimately claimed their PPI was mis-sold. Mr and Mrs Smith are not good with money. They are not good with budgeting. They regularly miss a payment or go into default. They have a loan of £4,000 with a Bank. They have paid approximately £3,000 but are £400 in arrears. They have been in and out of arrears for 5 years. Do we really expect this couple to write down a note of all the missed payments, how much and how much was owed. Why is this question asked when the Bank knows the answer? Why indeed do the Regulatory Bodies allow such a question to be asked. Quite simply, if you have arrears and there is a PPI pay out the Bank or Financial Institution are fully entitled to offset those arrears. What therefore can be a reasonable consequence of a concerned consumer who has had problems with finance. The answer is simple. They will be put off, they will not return the paperwork and the claim will be lost. There is absolutely no reason for such a legitimate claim to be lost. There is no reasonable reason to ask that question. It is off putting, it is insulting, it is embarrassing to many a consumer. It is quite simply unfair.
If you have any misgivings with regards the questions in the PPI Questionnaire, Scottish PPI Expert are here to help you. We offer a ‘No Win, No Fee’ payment structure and have had significant success in the application we have made for our clients in the past having recovered over £80m in compensation claims.