'"Wish I'd been stupid enough to get PPI in ...

[MSE Helen]

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Wish I'd been stupid enough to get PPI in the first place" Blog.

Please click 'post reply' to discuss below.

[SavvyS]

I had opened a current account (for salary purposes) with Lloyds TSB and I was told that a PPI was compulsory. I was told that for every pound spent on my debit/credit card I would be paying some pennies towards the PPI. I did not use the credit/debit cards so effectively I have not spent anything towards the PPI. Should I still complain? Would I still be entitled to a compensation?

[working]

The thing is, these people who didn't read the small print (and are therefore foolish for not doing so) have been rewarded because of the interest recieved.
In most cases this puts them in a better position because they wouldn't have invested the money in an 8% account in the first place.

[Millie Millsters]

Originally Posted by working

The thing is, these people who didn't read the small print (and are therefore foolish for not doing so) have been rewarded because of the interest recieved.
In most cases this puts them in a better position because they wouldn't have invested the money in an 8% account in the first place.

Did you actually read Martin's blog??

[oldvicar]

Being LIED to that policies were compulsory – they weren’t.

Yes they were ... if you wanted to be accepted for a loan.

Everybody who wasn't stoopid knew that.

MSE probably even commented at the time about the quasi-compulsory nature of these policies ... and if he didn't then where the hell was he?

[Percy1983]

Sorry but I still do feel its wrong, I read small print so never ended up with PPI, with that I didn't the security of PPI.

I seems if somebody at the same time didn't read the small print then they got x years of security and at the end out it get the money back anyway.

So a the savvy person gets nothing, less savvy people gets years of free insurance.

[MSE Martin]

Originally Posted by oldvicar

Yes they were ... if you wanted to be accepted for a loan.

Everybody who wasn't stoopid knew that.

MSE probably even commented at the time about the quasi-compulsory nature of these policies ... and if he didn't then where the hell was he?

No at the time I said "it wasn't compulsory" as it wasnt and not to go for it - as you could get far cheaper standalone policies if it was neeeded (its even if my first book I think). And that's the point. This was a lie - to be compulsory the PPI had to be within the APR. So if they said it was, or even worse, it actually was then the whole thing is a scam - which takes us back to the blog.

[RuthnJasper]

I have an IQ of 159, hopefully I'm not stupid... but I got PPI because I was told it was necessary.

I have yet to receive anything back; I'm still awaiting a decision from the FSA.

Of course, if it was some dodgy 'back street' place then it's sound to read the conditions extremely carefully (if you even find yourself these in the first instance) - but most of these loan and card providers are long-established businesses with a reputation to protect. Therefore you expect that their advice is correct and honest.

This doesn't mean that I'm daft, though I certainly feel stupid.

[Alpine Star]

Originally Posted by Percy1983

Sorry but I still do feel its wrong, I read small print so never ended up with PPI, with that I didn't the security of PPI.

I seems if somebody at the same time didn't read the small print then they got x years of security and at the end out it get the money back anyway.

So a the savvy person gets nothing, less savvy people gets years of free insurance.

They didn't get ''years of free insurance'' because, in broad terms, they either didn't know they had it or couldn't claim on it if they did - due to it being mis-sold. Get it?

[Percy1983]

Originally Posted by Alpine Star

They didn't get ''years of free insurance'' because, in broad terms, they either didn't know they had it or couldn't claim on it if they did - due to it being mis-sold. Get it?

Just because they where told they had to have it when they didn't they can't claim on it?

I am pretty sure they could claim and I guess many did.

With that can people still claim it back if they made a claim? as that would be even worse.

[Alpine Star]

Originally Posted by Percy1983

Just because they where told they had to have it when they didn't they can't claim on it?

Like I said in broad terms PPI was mis-sold either because it was loaded without the express knowledge of the customer or because it was unsuitable and couldn't be claimed on. Only a relatively small proportion was mis-sold as being compulsory - Competition Commission figure bear this out - and as such your ''years of free insurance'' theory largely doesn't apply. But even if it did, so what?

Perhaps those who flogged PPI should have read the FSA small print that obliges them to refund mis-sold premiums plus 8%.

[oldvicar]

Originally Posted by MSE Martin

No at the time I said "it wasn't compulsory" as it wasnt and not to go for it - as you could get far cheaper standalone policies if it was neeeded (its even if my first book I think). And that's the point. This was a lie - to be compulsory the PPI had to be within the APR. So if they said it was, or even worse, it actually was then the whole thing is a scam - which takes us back to the blog.

Fair point Martin. It was a lie and a scam, all to enable the banks to effectively charge more than the APRs they quoted.

This misrepresentation was illegal. When it was happening I knew it was wrong, you clearly knew it, and the banks must surely have known it to come up with such schemes. It's hard to think that the regulator didn't know it but chose not to do anything about it. Above all some borrowers (maybe a minority) knew it too - some may even have read your advice - but they chose to be complicit with the lie through fear that their loan application would otherwise be rejected. Let's assume that fear was genuine, and the banks did all they could to instill such fear, but could not of course go so far as to widely confirm that PPI was compulsory - because they knew that to say so meant it would need to be in the APR.

This sharp practice could have been nipped in the bud, by the regulator. Banking licences could have been threatened, or even actually revoked. Bank directors could have been guillotined (sorry, censured or even disqualified). There could have been public campaigns demanding that the banks operated properly within the law.

The question is whether the mass compensation of PPI victims is now an appropriate or even adequate response. I like Percy's views, and I believe that some (most) are being financially over-compensated. Others it seems were left desperately uninsured and giving back the premiums (plus a bit) is hardly the point. It is easier, it seems to me, to let the broad munificence of the compo brush the possible criminality of the original actions and failings of the regulator under the carpet. It does little to restore decency and honesty to banking. It almost risks encouraging future misbehaviour as a calculated financial risk.

[Dave save]

Well I consider myself to be reasonably sensible, and have NEVER taken out a policy which protects payments or extends a warranty. I am still here and the goods I purchased have served me well. I think the term 'stupid' being applied to people who took out these policies is a little over the top. However, they must now admit they were conned, and as with all cons, there are usually two parties, the con artists and the gullible ones. Let's hope they learned a valuable lesson.

[dunstonh]

An IFA on another site has posted that a client that was a policeman phoned him up to ask if he has PPI as he wanted to reclaim the premiums as everyone is doing it. The IFA told him he didnt as he didnt need it and wasnt given it. A few days later the policeman complained that he wasnt [mis]sold it as it now prevents him from getting a payout.

I think the banks are being punished as they are now suffering try-it-on and fraudulent complaints and they are paying out on cases where they have no reason to pay out on. Unfortunately, more innocent parties are being drawn into it (like mortgage advisers paying £500 FOS complaint fees because claims companies refer cases to the FOS even where no PPI was put in place but the claim company still refers it anyway).

My own compliance company have said around 1/3rd of complaints currently are try-it-on/fraudulent. Another firm said that around half the complaints they get about PPI dont even have PPI.

The banks did wrong and need to deal with the wrong doing but it has also allowed very many opportunistic complaints.

[pineapple]

Originally Posted by Dave save

Well I consider myself to be reasonably sensible, and have NEVER taken out a policy which protects payments or extends a warranty. I am still here and the goods I purchased have served me well. I think the term 'stupid' being applied to people who took out these policies is a little over the top. However, they must now admit they were conned, and as with all cons, there are usually two parties, the con artists and the gullible ones. Let's hope they learned a valuable lesson.

Forgetting the compulsory instances, I'm one of the many who refused because I realised it wasn't suitable. It's about time us sensible ones were rewarded.
A prize for not being a numpty?