THE IMPACT OF PARAGON v PLEVIN
The significance of Paragon v Plevin relates to the concept of “unfair relationship”. To be technical this refers to Section 140 of the Consumer Credit Act 1974. The Court decision in 2014 was the first time that this Section of the Consumer Credit Act had been challenged to such a high judicial level.
The circumstances briefly were that at the time of sale Mrs Plevin was a widowed College Lecturer age 59 living in her own house with a mortgage and various unsecured personal debt. She responded to an unsolicited leaflet put through her letterbox by an independent Credit Broker called LLP Processing UK Ltd. By the time of the Court case that Company had gone into Liquidation.
In short, this lady took out a mortgage which went through Paragon Personal Finance Limited. It was a loan paid over 10 years. Included in the same was Payment Protection Insurance with a lump sum premium of £5,780. Accordingly her loan of £34,000 was increased to £39,780.
Of the premium of £5,780 it is incredible to state that 71.8% was taken as commission. This was transmitted to Paragon who effectively retained £2,280 and sent LLP £1,870.
The main point is neither the amount of this commission nor the identity of the recipients was disclosed.
Readers will be astonished to note the commission that was involved and effectively the profit margins involved. Paragon are described as a sub-prime Lender, meaning that anybody who uses them usually has had some problem with finance. Accordingly, interest rates are more expensive. We are not saying that Mrs Plevin had such problems but she was sold that product. If she had not had financial problems and was sold this product the sale was even worse.
You will see, with such an add-on, to which a significant interest would have been paid per month this lady paid significantly more that she needed to pay and indeed, significantly more than was disclosed. You will of course note that she was a Headmistress and as such it is reasonable to presume that she had reasonable, if not significant sickness and illness benefit.
LLP were the agents acting on behalf of Paragon. There were effectively two elements of unfairness :-
- The non-disclosure of the amount of the commissions;
- ……………………. of any of those involved to assess and advise upon the suitability of PPI for her needs. In particular in this case the PPI only covered half the term of the Insurance, she had no dependents, she already had Life Insurance and her terms of employment included general Sickness and Redundancy Benefit.
It is easy to see why this was regarded as an unfair relationship.
If a client intimates against a Lender who sold PPI they are accordingly entitled to receive not only all the payments that they made on the improperly sold PPI. It is clear that they should not suffer due to the fact that commissions were paid.
In many a case the Banks/Financial Institution have looked at all commissions that were paid and ensured that these were reimbursed. On a number of cases it is quite clear that commissions paid were not taken into consideration.
Again, this is something that any consumer considering the merits or otherwise of PPI should look into. It is a more difficult and complex issue than the basic mis-sale of PPI. It is one of the main reasons why a reputable Claims Management Company or Solicitor might well be instructed. That is the choice of the consumer.Read More
We hear little of the Chief Executive of the Lloyds Group these days on PPI matters. He appears to be doing a very good job in all other areas. When he originally took his post he was exceedingly critical of Claims Management Companies. Indeed, he suggested elements of dishonesty. It has always baffled me how anyone intimating themselves, or using a Claims Management Company or Solicitor Company to intimate a PPI claim could be described as being potentially fraudulent. If a Policy did not have the product it would be refused. If the product had PPI and the Bank were of the opinion it was fairly sold how could anyone suggest the intimation was fraudulent.
There are no doubt people that sold PPI have lodged claims when they frankly hadn’t a clue what was going on. There are no doubts at all that people who have no idea whether they had PPI have intimated claims. In many respects this goes to the route of this grossly mis-sold product. Lack of discussion with or information provided to the consumer.
With regards to the fine on the Lloyds Banking Group, this related to Lloyds Bank plc., Bank of Scotland plc., and Black Horse Limited. This related only to the method by which they treated customers, unfairly when handling Payment Protection Insurance complaints. Between March 2012 and March 2013.
It was estimated that during that period 2.3 Million PPI Policies were investigated and some 37% of the complaints were rejected at first instance. The requirement from the Financial Conduct Authority is that Firms assess these complaints impartially are naturally allowed to reject unfounded claims (In other words the culprit Organisation is to act as an impartial Judge & Jury).
However, in March 2012 the guidance to Lloyds instructing complaints handlers at Lloyds was that the overriding principal when assessing complaints was that Lloyds PPI sales process was compliant and robust unless told otherwise. They described this as “the Overriding principal”. Much of this was brought to light by an article in the Sunday Times some years ago. In short, a Sunday Times Reporter obtained a job at the Lloyds Complaint Unit and ascertained how they dealt unfairly with these complaints.
It was accepted by the Financial Conduct Authority that some Complaint Handlers relied on this overriding principal to dismiss customers’ personal complaints and accounts of what had happened during the PPI sale or indeed did not fully investigate them. In many cases Lloyds who were meant to contact customers to check over their version of events did not do so.
At the time, it was commented by the Financial Conduct Authority that “The size of the fine today reflects the fact today that so many complaints were mishandled by Lloyds. Customers who have already been treated unfairly once by being sold PPI were treated unfairly a second time and denied the redress they were owed. Lloyds conduct was unacceptable”. Examples of how customers lost out as a result of the Lloyds failings included:-
- Complaint Handlers justified the decision to reject customers’ complaints on the basis that the sales process used by Lloyds was robust, as directed by the Overriding principals. This was when Lloyds knew there was significant process failures and indeed mis-selling.
- Some consumers had their complaints rejected on the basis they had been “fully investigated” with “appropriate weight and balance consideration given to all available evidence”. This was not the case.
- A customer’s account of what had actually happened was not always considered in a balanced way. The evidence of the Bank paperwork was preferred.
- Due to poor contact of the consumer, or indeed no contact some customers who clearly would have provided further evidence were not given that opportunity.
Since that date the Financial Conduct Authority has appointed an Independent body to oversee the remediation process. However, this was over 2 years ago. We are still receiving information that the remedial process is still underway. The obvious concern for any consumer is that whereas they are advised to simply “sit back and await for the Bank to re-look at cases” there is now a time bar. For how long do clients sit and wait?
As a subscript to this post, as recently as 22nd July 2017 the Guardian newspaper reported Lloyds Banking Group will take another hit from payment protection insurance mis-selling this week, taking its bill for the scandal close to £18bn.Read More
Fines imposed on members of the financial industry such as Banks or Brokers – Some consumers are surprised when you mention fines! Why Should they be surprised?
This article is not one for light evening reading it is to advise of some of the fines imposed, the seriousness of the same and the amount of this considerable problem of which the Guardian Newspaper believe that one out of 5 claims only have been made.
In previous blogs I have mentioned the fine to Clydesdale Bank of 20.6 Million. Clydesdale Bank and their sister Bank – Yorkshire Bank were fined for, including providing false information about complaints to the Financial Ombudsman Service, meaning that many of the 126,600 PPI complaints that Clydesdale Bank made a decision on between May 2011 and July 2013 up to 42,200 may have been rejected unfairly.
The Financial Conduct Authority also says that some 50,900 upheld complaints may have resulted in the consumers receiving inadequate redress.
Of considerable concern to the Financial Conduct Authority was that Clydesdale’s failings mainly occurred after April 2011 which was the date when the High Court effectively rules that it was unfair to place cases on hold and providers had to follow a list of rules to proactively find and compensate consumers who were mis-sold.
Lloyds Bank were fined £117 Million in a decision published in June 2015 in respect of their failures between March 2012 and 2013. During that period more than 2.3 Million PPI Policies were considered and 37% of claims were rejected.
Lloyds were hit with fines due to the fact that they had issued guidance to the complaint handlers that the overriding principal when assessing complaints was that Lloyds PPI sales were compliant and robust. This was defined as the overriding principal.
Lloyds did not advise their own complaint handlers of know failings identified by them in their sale process. Many complaint handlers happily followed in this Overriding Principal to unfairly reject the complaints of the consumers.
Here are some of the others:-
- EGG – fined £721,000 in December 2008 for serious failings in its credit card PPI sales by telephone between January 2005 and December 2007. The FSA found failings in approximately 40% of telephone sales of credit card PPI made by EGG in a 2 year period. When customers said on the phone they did not wish PPI the Firm directed its sale staff to use techniques to persuade the customers to take the Insurance called “objected handling”. These techniques included over-emphasising the positive feature of the PPI or telling the customer they could take the PPI for a free period and cancel it later if they didn’t want it. In some cases, even when the customer did not consent, PPI was applied to their credit card anyway.
- Alliance & Leicester (Santander) were given fines of £7 Million in October 2008 for serious failings in its PPI telephone sales between January 2005 and December 2008. Alliance & Leicester (Santander) did not make it sufficiently clear that PPI was optional and it trained its staff to put pressure on customers where they queried the inclusion of PPI in their quotation or challenged Advisors recommendations.
- 5 Motor Retailers: GK Capitals Group Limited; George White Motors Limited; Ringways Garages (Leeds) Limited; Ringways Garages (Doncaster) Limited and Parks of Hamilton (Holdings) Limited – Fined £175,000 in August 2008 for exposing 2,175 customers to the risk of being sold unsuitable PPI Policies.
- Liverpool Victoria fined £840,000 for serious failings in the sale of single premium PPI by telephone.
- Land of Leather fined £210,000 for not having effective monitoring or training of PPI sales. In addition, their Chief Executive was fined £14,000 for failing to properly oversee the sale of PPI by the Firm.
- HFC Bank (also trading as Household Bank) and Beneficial Finance fined £1.085 Million for putting customers at an unacceptable risk of being sold an unacceptable Policy.
- Black & White Group Limited (now in Liquidation). This would have led to a fine of £2.2 Million.
- Regency Mortgage – fines of around £56,000
- Loans.co.uk – fined £455,000
- Redcats (Brands) Limited – fined £270,000
- GE Capital Bank – fined £610,000
- Hadenglen Financial plc – fined £133,000 and their Chief Executive was fined £49,000
- Swinton Group – fined £770,000
- CT Capital Limited (CT Capital) – fined in 2000 – £360,900 (in the case of CT Capital between May 2011 and November 2013 dealt with some 6,669 PPI complaints). CT Capital failed to put in place complaint handling processes to deal with PPI complaints appropriately which resulted in consumers missing out on redress payments to which they were entitled. The effect on individual consumers was potentially significant. The average redress payment made in respect of a fully upheld complaint during that period was £5,959. It appears that despite being aware that specific provisions governed the handling of PPI complaints had come into force in December 2010 CT Capital failed to put in place processes designed to follow these provisions until November 2011. Even after that time CT operated flawed Policies.
Clydesdale Bank – fined £20,678,300 for serious failings in its PPI handling. In the Clydesdale’s case the Judicial Review decision in April 2011 they implemented in mid-2011 inappropriate policies to deal with complaints. In effect its complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints. In addition, between May 2012 and June 2013 Clydesdale provided false information to the Financial Conduct Service in response to requests for evidence of the records Clydesdale held on PPI Policies sold to individual consumers. A team within Clydesdale’s PPI complaint handling operation altered certain system print outs (in a small number of cases) to make it look as if Clydesdale held no relevant documentation and deleted all PPI information from a separate print out listing the products sold to the consumers. These practises were not know to or authorised by Clydesdale PPI Leadership Team or more senior management.Read More
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.Read More
To use or not use a solicitor to make your PPI Claim, abiased but reasoned opinion of a solicitor who has assisted in gathering over £50 million pounds for the consumer.
In 2007 when this Firm originally looked at our Client Bank to investigate the possibilities of PPI (Payment Protection Insurance) claims I had no idea whatsoever of the size of industry that would develop.
I became aware of the potential due to my moderate attempts on a Sunday to buy a quality newspaper and read the financial section to try and educate myself. I am still trying! I noted one or two very discreet mentions of PPI investigation and the possibility of mis-selling. Accordingly after months of investigation embarked on my most significantly business development venture.
I wrote to clients who we dealt with in re-mortgaging from Trust Deed or Sequestrations. This being somewhat of a speciality of the Firm in those days.
The business developed slowly. Initially there were rejections which we referred to the Ombudsman.
Then of course came the “Credit Crunch”. As a result of the “Credit Crunch” three of my most significant property development clients were not able to develop properties. They were, however, in a particularly advantageous financial position and after some 6 months of asking me about property development proposals (of which there were very few due to the restraints of the “Credit Crunch”) they agreed to invest in a Claims Company and refer work to Carr Berman Crichton. From there the business developed. Other than our own Client Bank and advertising through our own website and e-mail letter we receive referrals from a number of Claims Management Companies. From very early stages Banks encouraged clients to lodge their PPI applications through them. They indeed regularly telephone clients to advise them to do so and sack us. And indeed very blatantly encouraged their clients not to use us. Indeed the websites of most Banks to this day carry advices not to use a Claims Management Company. My own Firm, a Firm of Solicitors effectively came under the same umbrella.
It was disappointing to note that “WHICH” and Martin Lewis – “Money Saving Expert” regularly repeated the fact that the clients could proceed without the use of a Claims Management Company. Again, it was fair to say that a Solicitor was not mentioned but we came under the same umbrella.
If a client has time, is able to read a several page Questionnaire and complete the same there is of course nothing to stop them dealing with the case themselves if they have the data. It is their right. However, the Questionnaire in itself is geared in many respects to put off the consumer and we have no doubt at all that thousands if not dozens of thousands of consumers throughout the UK have either lost claims or not proceeded with claims due to their inability to complete this paperwork.
In particular there are questions relating to a consumer’s financial position when they took out a loan. There are comparatively few people who retain all their financial records and are in a position to advise what their financial position was 5/10/15 years ago. However, that problem can easily be assisted by a Solicitor or reputable Claims Management Company.
Again, there are regularly questions about the indebtedness of a client, specifically asking whether they had missed any payments. For a reasonably educated person it is clear that question may put them off but in many respects they will appreciate that all the Banks can do if they are in arrears or had missed payments of an active account is to offset any legitimate PPI claim.
Unfortunately, many millions of the population of the United Kingdom are not as well read and educated as they should be. They have difficulties generally with paperwork and even if they can manage paperwork they have struggles with questions such as their financial position several years ago and indeed have clearly been put off by questions about arrears. I have absolutely no doubt at all that many a consumer who has unfortunately been a victim of the world we live in i.e. pressure “to have what our neighbour has” and have had a trail of indebtedness have been put off in completing that Questionnaire and therefore voiding their own claim. In many a case they had one.
It is unfortunately my reasonable assumption that many thousands of consumers have lost cases because they have received the Payment Protection Insurance and Questionnaire and not had the ability, knowledge or education to complete the same. What is right for some consumers is not right for others.
It is pleasing to note that despite the recommendations from such as WHICH and Money Savings Expert as well as most of the financial columnists in our newspaper that there has been some realisation that Banks are not wonderful people and have not dealt with these complaints to a significant extent in the manner they should. There are of course exceptions.
Recently, Martin Lewis has confirmed that there is a lack of trust in Banks dealing with complaints in the first instance. He has confirmed that it is “outrageously hard for people to find out if they ever had PPI”. Indeed a comment from a representative of WHICH recently refers to the “current process as being wholly inadequate and driven too many consumers to use Claims Management Companies”.
Accordingly, having looked at these concessions and comments in papers at the beginning of March when the 2 year timetable was provisionally announced for time-bar of these claims, it is quite clear that there is, has been and will be a continuing need for reputable Claims Management Companies (totally distinct from the rogues) and Solicitors to assist clients in dealing with these cases.
The consumer has the option to deal with a case themselves. This has never been in dispute. This has never been argued. What the consumer also has is a right to independently instruct a Solicitor or Claims Management Company who will use their experience and professionalism in dealing with these cases to hopefully achieve a result. That is the consumer’s choice. The consumer has in many respects been let down by being influenced by others not to take independent advice when they have been unable to progress a case and deal with paperwork themselves.
We have always known of a 6 Months Rule lodging an appeal with the Ombudsman if a PPI claim has been refused. Until last summer, all a financial body required to do was refer the consumer to the Ombudsman and indicate they had a right to claim. It was not obligatory until the summer of last year that the consumer was told of the 6 Months Rule. How many consumers, taking the encouragement to deal with a claim themselves lost cases due to time-bar?
The consumer deserves choice. If you wish to instruct us in any of these matters please e-mail myself who Colin Peter Carr who is a Solicitor and Director of Carr Berman Crichton and supervises these cases from our Glasgow Office. We can deal with cases throughout the United Kingdom.
Contact: firstname.lastname@example.orgRead More
Is there a case for re-assessment of claims ? Some months ago, my colleagues in a Claims Management Company of which I am a Director were asked to attend a meeting with one of the major (PPI) Payment Protection Insurance Companies in the United Kingdom. It was revealed by the said Company that significant data which should have been either made available to clients, Claims Management Companies or Solicitors had wrongly been withheld. In some cases this may have been in error in other cases, the conduct of Banks/Financial Institutions was quite questionable.
At Carr Berman Crichton we have been involved in writing to approximately 16,500 of our old clients asking if we can re-consider their claim.
The only disappointing feature is out of the 16,500 we have only had 4,500 replying to date which represents only ablout a quarter of the original mailing. We received our first offer in August 2016 in cases we had asked Financial Institutions/Banks to re-consider. To date, we have received 1.3 Million in offers for clients for cases which have been previously considered. All these cases related to data which had previously not been revealed.
The average offer to the consumer has been approximately £2,000. Our biggest offer £45,000. The lady’s daughter who was her only child was about to be married approximately a month later and a modest wedding for her one and only was turned into a significant event which is particularly pleasing.
Accordingly, should you have previously dealt with a claim yourself though a Claims Management Company before 1st January 2013 with either :-
- Black Horse
- The Royal Bank of Scotland plc
We are happy to look at the case further.
Colin CarrRead More
Early in March 2017 a preliminary announcement was made confirming that there will be a PPI cut-off date on the 29th of August 2019 for the lodgement of PPI claims. Any claims made after that date will be time barred. For many a consumer the cut-off date would be at least two months earlier as any consumer seeking information from a Bank by obtaining a Subject Access Report which should supply all the details that the Bank has on that individual can legally be delivered up to 40 working days after the receipt of the request. In reality two months.
Accordingly, for anyone who does not hold the data who wishes to make a PPI claim the cut-off date for them could well be sometime in June. It would not be unreasonable to expect that Banks will not expedite the delivery of these Subject Access Reports and anyone who claims within the two month period and receives the information post 29th August 2019 may well argue that they should be allowed to intimate due to the delay on receipt of data, but that is an argument which would be risky for the consumer to make. Accordingly, my own Firm and any Company that provides us with PPI work will require the consumer to instruct us, if they do not have data by the 1st of June 2019.
Accordingly, for most consumers who have not claimed, whom we can only presume do not hold data, the time limit is much closer.
The moderate publicity generated by the preliminary announcement provided a startling statistic from the Financial Conduct Authority who revealed that some 52,000,000-64,000,000 PPI Policies were sold to approximately 30 Million consumers between 1990 and 2010. Amazingly, it is suggested that only approximately 1 out of 5 complaints about potential mis-sold PPI have been made so far. A figure which many of us involved in the PPI Claims Industry find astonishing.
The reason we find it astonishing is that quite distinctly from the prior Endowment mis-selling scandal there has been significant publicity the vast majority of which has been made by Claims Management Companies or Solicitors like ourselves dealing in this field. Indeed, the other major source of publicity have been Organisations which have publicised the work of Claims Management Companies in particular criticising the same and suggesting that consumers should see the Banks themselves. This, in my humble opinion, may well have assisted a number of consumers but I believe it is significantly outweighed by the fact that a considerable amount of our public unfortunately are not able to cope with the paperwork involved in these claims. Accordingly, I believe that money has effectively been saved by the sellers of PPI by this publicity. I will deal further with this in another blog.
It is understood, although there are no details available at present, that a significant arrangement has been made between the Financial Conduct Authority and members of the British Banking Association or other bodies who are not members, all of who sold PPI to advertise claims from the 29th of August. There is no doubt that much of this publicity will indicate that the kindly Bank or Financial Institution will deal with the claims themselves. As these potential claims have been well known in the Financial Services Industry since 2007 it is amazing that committed Financial Institutions looking to resolve these issues would not have gone through their database by now.
It is anticipated that not only will the Banks advertise that they can deal with the mis-selling of PPI claims but will also encourage the consumer to contact them directly. In addition, various Claims Management Companies will of course generate advertising. It is reasonable to believe that 2 year period and for a year or two thereafter while various claims at the Ombudsman are still being resolved there will be a substantial increase in PPI pay-outs.
There is no doubt that the benefits or otherwise of a time-bar on the 29th of August 2019 can be argued as either being a positive or a negative. From the point of view of the Financial Institutions involving PPI it certainly, in general terms appear reasonable that there should be a time-bar set for these claims. This on the basis that the product although still sold is sold on a more restricted and sensible basis, Regulations have clearly tightened up internally in most PPI providers and the product in the whole is now sold to benefit those who should take and potentially benefit from the same. It is also not unreasonable to suggest that a time-bar will allow the members of the British Banking Association i.e. the Banks, to budget accordingly and thus enable them to stabilise their own financial position to try and ensure that the “Credit Crunch” of 2007 onwards will not be repeated in any similar form or nature in the foreseeable future.
It is also clear that there are some benefits to the consumer in that the considerable publicity that will be generated from the end of August from either the Financial Conduct Authority, British Banking Association, Financial Service providers who sold PPI, Claims Management Companies and Solicitors should encourage numerous parties who have not got around to claiming to claim (some of us may think this is quite remarkable 7 years down the line.) Those that are not sure whether they took PPI may be encouraged to take advices as to whether or not they did (in this respect I would clearly encourage the use of a Solicitor or reputable Claims Management Company to try and trace the data); or those consumers who literally do not have a clue whether they took PPI or not, but who clearly must constitute a considerable percentage of the 30 Million consumers who apparently bought the product and did not realise they have done so (again I would encourage the use of a reputable PPI Claims Company or a Solicitor). The main concern, is that whereas the Financial Conduct Authority have suggested only one in five complaints have potentially been made it appears to anyone involved in the claims industry relating to the mis-selling of PPI that even the 2 year advertising campaign by the Financial Conduct Authority with the Banks paying the supposed £42,000,000 for advertising will not extract all the legitimate claimants. It is quite clear that over the next few years consumers when conducting a “spring clean”, possibly a house move, dealing with papers after death of one of a couple may come across paperwork which shows there is a significant potential claim. It seems grossly unfair that anybody who has a claim, and who through their own unfortunate ignorance – probably the same ignorance that got them to take the product in the first place – does not claim should not be entitled to a reimbursement, which on some occasions may be significant.
As a Practising Solicitor I am of course interested in dealing with these claims. It appears to me however quite apparent that somebody whose assets have been depleted significantly due to mis-selling of PPI cannot when they eventually discover they have a claim make the same.
There has been a suggestion of a Judicial Review taking place in respect of the Financial Conduct’s handling. However, I would not anticipate that will change what has now been decided.
Over the years, while fully respecting what “WHICH” and Martin Lewis of “Money Saving Expert” have been saying about PPI claims, I have always disagreed with their emphasis of the consumer carrying out the claim themselves. There are many, many people who can of course carry out the claims themselves. Indeed, I suspect that the vast majority of people reading this article are well able to do so. However, other than many businessmen, businesswomen, housewives and citizens from all walks of life who would much prefer this to be dealt with by an independent representative such as a Solicitor as they are too busy in their day to day lives, it is absolutely clear that a significant percentage of the population do not trust Banks to carry out these reviews correctly and more importantly do not have the ability to complete Questionnaires, be put off by questions in Questionnaires by being directed in the direction of the Banks, who are obviously not too anxious to have a consumer complete a Questionnaire correctly as claims that do not progress save the shareholders’ of Banks money. It is quite clear in my opinion that there is a significant need for reputable Claims Management Companies and Solicitors.
Indeed, Martin Lewis of “Money Savings Expert” and WHICH are clearly against this 2 years’ timetable. It is interesting to note that in their responses to the preliminary notice of the two year limit Martin Lewis has indicated “until we can trust Banks to deal with complaints fairly in the first instance, this move to protect the balance sheets should not happen. It is putting the protection of the Financial Industry ahead of the consumer. Many Banks make it outrageously hard for people to find out if they ever had PPI”. I have no disagreement whatsoever with what Martin Lewis says. It does appear to me that what he says shows that many consumers have been right for the last 10 years. They cannot trust Banks; they cannot trust the people that mis-sold a product to deal with a claim fairly. Accordingly, they have gone into the hands of reputable Claims Management Companies, Solicitors and of course unfortunately some not so reputable Claims Management Companies.
I similarly believe that the comments from WHICH suggest that the Banks have not been working hard enough to resolve PPI claims fairly. Accordingly, this compounds my argument.
If you have the time, have the desire and can clearly comprehend paperwork, complete the same and keep an eye on it, you are fully entitled and of course it is your right to deal with a claim yourself.
Despite the considerable decline in the level of PPI claims, Scottish PPI Expert still continue to be regularly consulted by clients to make claims for recovery of financial recompense. Today Scottish PPI Expert received notice of their biggest ever PPI claim offer for a client in the sum of £49k. This beats the previous £44k.
Have you checked if your are entitled to compensation for Mis-sold PPI products? You could be owed thousand of pounds!
Simply complete the contact form on our website, we will do the rest.
Anyone seeking compensation over mis-sold payment protection insurance (PPI Claims) will now have to make their claims before 29 August 2019. This is the final deadline has been set by the Financial Conduct Authority (FCA) in an effort to draw a line under one of the banking industry’s biggest scandals. If you are thinking of applying, make sure you do so well in advance as we expect that there will be a rush just prior to the deadline date.Read More
About 45 million policies were sold over the course of 20 years from 1990 – Millions of people have already completed their questionnaires and been compensated and banks have set aside more than £40 billions set aside to cover the payouts and it is believed that many more are yet to come forward.
The figure is expected to grow as complaints continue to be raised, says Citizens Advice.
The scandal saw millions of customers mis-sold insurance policies they were told would protect them against losing their jobs or falling ill.
The policies were supposed to pay off any outstanding loans or mortgages, but many people did not need the policies in the first place, and others were unaware they were even paying for them. Some people were also sold PPI even though their circumstances meant they would not be eligible to claim. So, should these claims be re-assessed?
The impact of PPI has been so significant that in 2012 the OBR stated its economic growth forecast of 0.8% over two years would be mainly due to the impact of PPI fee repayments as people spend their payouts, the major banks have billions set aside for this purpose.
In recent months major banks have said that they are now putting increased sums of money away to cover upcoming PPI compensation payouts.
As well as mis-selling PPI, the Financial Conduct Authority (FCA) has fined some banks for mis-handling people’s complaints. In previous years Lloyds has been fined a record £117 million for mis-handling.
“While regulation and banks’ approach to customer service has improved in recent years the seismic failings around PPI should serve as a constant reminder that firms cannot get away with ripping off customers,” commented Gillian Guy, Chief Executive of Citizens Advice.
At Scottish PPI Expert, we believe the customer deserves the right to a good Solicitor when making a claim, so if you wish to instruct us in any of these matters please e-mail myself who Colin Peter Carr who is a Solicitor and Director of Scottish PPI Expert and Carr Berman Crichton and supervises these cases from our Glasgow Office. We can deal with cases throughout the United Kingdom.
Anyone seeking compensation over mis-sold payment protection insurance (PPI Claims) will now have to make their claims before 29 August 2019. This is the final deadline has been set by the Financial Conduct Authority (FCA) in an effort to draw a line under one of the banking industry’s biggest scandals. If you are thinking of applying, and there are still billions set aside make sure you do so well in advance as we expect that there will be a rush just prior to the deadline date.Read More