Payment Protection Law
Payment Protection Insurance has been capturing the headlines once more in recent weeks as The British Banking Association finally bowed down to pressure from consumer action groups and The Financial Services Authority and accepted the decision of the High Court's Payment Protection Law review. The decision is excellent news for consumers as it means many thousands may now be entitled to claim compensation for mis-sold insurance policies.
The media storm regarding PPI began back in 2005, when The Citizens Advice Bureau launched a 'super complaint' criticising the cover and the way in which it was sold. Their report highlighted failings by many banks to properly monitor sales and to protect consumers from mis-selling. They also criticised the high cost of the cover and the large number of exemptions attached to the policies.
Up until the complaint, Payment Protection law had been relatively relaxed. Although regulations were in place many lenders sold policies with almost complete disregard for rules and consumer rights. The Citizens Advice Bureau's complaint prompted two high profile investigations by the Office of Fair Trading and The Financial Services Authority. Their reports revealed significant failings across the industry and, as a consequence, many lenders were handed significant fines.
In an effort to prevent a repeat of the PPI scandal the Financial Services Authority announced a new set of regulation designed to protect the consumer. The British Banking Associations was unhappy with the new regulations, though, and requested the courts undertake a payment protection law review.
In April the court revealed its findings and rejected the British Banking Associations challenge. The judgement was seen as a huge victory for consumers. Natalie Ceeney, Chief executive of The Financial Ombudsman Service, said of the decision:
'People have been waiting a long time while the banks' legal action has been ongoing. I would now like to see financial businesses showing real commitment to sorting out their customers' complaints efficiently and promptly.'
Time will tell whether the payment protection law ruling will prompt banks to handle complaints more thoroughly, but early indications are good. So far, several major banks have stepped forward to announce they will be allocating funds to deal with the issue. HSBC has set aside more than £250 million while Barclays has pledged more than a billion with Lloyds allocating a massive £3.2 billion.
Payment protection law review: what does the British Bank Associations defeat mean to you?
If you have been mis-sold a payment protection policy on a loan, mortgage, hire purchase agreement, store or credit card then the decision could be great news for you as you may be in-line for thousands of pounds in compensation. If you are unsure whether your policy was mis-sold take a look at our checklist below.
- Were you told you had to have the cover?
- Were you told taking out the cover would improve your chances of being granted the loan?
- Were you suffering from a pre-existing medical condition?
- Were you unemployed, self-employed, retired or in full time education?
- Were you entitled to sick pay from your employer?
- Did you have an existing policy elsewhere?
- Did your lender fail to fully explain the terms and conditions of the policy to you?
- Did your lender fail to explain the full costs of the policy to you?
- Were you sold a single-premium policy and not told it may not cover the whole term of your loan?
- Was the policy added without your consent?
If you answered 'yes' to any of the above questions then the payment protection law review could mean you are entitled to make a claim for mis-selling that may be worth thousands of pounds. To start your claim, simply complete the quick claim form above. If you are still unsure whether you could make a claim call our customer care team on 0207 471 2000.
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