Financial Ombudsman Annual Report 2008/2009 re: PPI

edited 30 November -1 at 1:00AM in Reclaim PPI & Other Insurance
6 replies 956 views
troutanglertroutangler Forumite
10 Posts
edited 30 November -1 at 1:00AM in Reclaim PPI & Other Insurance
Currently I am pursuing a complaint about the mis-selling of a PPI policy on behalf of my son against Hayston Garages Ltd.

At the point of sale the salesperson failed to question my son about any pre-existing medical conditions he had when he purchased the policy.

The company are dragging it out and taking their time to settlle the matter. I have written to the firm again and informed them of the following:

In the Financial Ombudsman Annual Report 2008-2009 it is reported that the volume of complaints received about Payment Protection Insurance tripled - following a five-fold increase in the previous year.

2008 / 2009 31,066 complaints received
2007 / 2008 10,652 complaints received
2006 / 2007 1,832 complaints received

The Financial Ombudsman upheld 89% of PPI complaints in 2009 in comparison to 47% in 2008 and it is anticipated that this figure will increase next year.

Currently this means that almost nine out of every 10 complaints are being decided in favour of the consumer.

I cannot wait for the firm to either settle the claim or not uphold the complaint because it will be like taking candy off a baby going through the Ombudsman.
:beer:

Replies

  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Currently this means that almost nine out of every 10 complaints are being decided in favour of the consumer.

    A caveat on that is that most of those were single premium PPIs, added to loan and/or for unsuitability over cover. All of which generally find in favour of the consumer. PPI when set up correctly (monthly, not added to loan/mortgage and suitability verified) has little or no chance of success in claiming money back.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • showergirlshowergirl Forumite
    885 Posts
    dunstonh wrote: »
    A caveat on that is that most of those were single premium PPIs, added to loan and/or for unsuitability over cover. All of which generally find in favour of the consumer. PPI when set up correctly (monthly, not added to loan/mortgage and suitability verified) has little or no chance of success in claiming money back.
    Does this mean ppi on a credit card is harder to claim and has little chance of success
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    showergirl wrote: »
    Does this mean ppi on a credit card is harder to claim and has little chance of success

    Having PPI is not a mis-sale. So, you have to have a reason for it being a mis-sale.

    If its being deducted monthly, there are no existing conditions or ineligibility which invalidate cover and the sale of it was correctly done then there is no reason for a complaint to be upheld.

    Where a financial adviser or mortgage adviser is involved, there should be a needs analysis on their files which backs up the recommendation of PPI. However, in the case of most non-adviser sold PPIs, there is very little documentation to support the sale. There is a general rule of thumb that if it isnt documented it didnt happen. It doesnt always follow and balance of probability decisions are often made where no documentation exists for either side.

    So, in the case of retailer or credit card or loan related PPI, there is often little or nothing supporting the sale of the product. So, if you have a good reason why you shouldnt have it, then it will nearly always result in an upheld complaint.

    Some people are trying it on and putting in complaints when they have no grounds for doing so. This sort of thing shouldnt be encouraged as ultimately it could work against genuine complaints if proportions of fraudulent claims get too high. However, some of these people do get lucky.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • petermb_2petermb_2 Forumite
    1.6K Posts
    dunstonh wrote: »
    Having PPI is not a mis-sale. So, you have to have a reason for it being a mis-sale.

    If its being deducted monthly, there are no existing conditions or ineligibility which invalidate cover and the sale of it was correctly done then there is no reason for a complaint to be upheld.

    Where a financial adviser or mortgage adviser is involved, there should be a needs analysis on their files which backs up the recommendation of PPI. However, in the case of most non-adviser sold PPIs, there is very little documentation to support the sale. There is a general rule of thumb that if it isnt documented it didnt happen. It doesnt always follow and balance of probability decisions are often made where no documentation exists for either side.

    So, in the case of retailer or credit card or loan related PPI, there is often little or nothing supporting the sale of the product. So, if you have a good reason why you shouldnt have it, then it will nearly always result in an upheld complaint.

    Some people are trying it on and putting in complaints when they have no grounds for doing so. This sort of thing shouldnt be encouraged as ultimately it could work against genuine complaints if proportions of fraudulent claims get too high. However, some of these people do get lucky.

    My viewpoint is slightly different to yours dunstonh.

    If you look at it from a product point of view for single premium PPI.
    The commission to the lenders for this product ranges from around 50% up to as much as 80%. That is a whole lot of money that could have been put to far better use. Especially when Which recently stated that 85% of people who attempted to claim on bank PPI failed.

    If you were not offered a monthly alternative to a single premium policy then the thing was mis-sold.

    As an adviser can you sell any product without highlighting the alternatives?

    The whole thing is a scam and people are being fooled into reclaiming some or all of their premiums plus a little tit bit to keep them quiet. They are due the premium plus the commission plus interest and could also challenge the loan itself, depending on how the loan was written.

    Again the whole thing is being whitewashed to protect the institutions.
    I am a former Broker, former IFA and former compliance officer, for my sins.

    However, I have since seen the light.
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    My viewpoint is slightly different to yours dunstonh.

    Reading what you say, it doesnt seem that much different to be honest.

    Single premium is virtually always a mis-sale.
    As an adviser can you sell any product without highlighting the alternatives?

    This is where IFA and tied agents start to differ. An IFA has to document potentially suitable options and document why they were ruled out. That is from the whole of market. A tied agent only has to document from within their product range. A limited product range means limited choice.

    Although advisers only tend to get involved on mortgage payment protection and PPI/PHI.
    Especially when Which recently stated that 85% of people who attempted to claim on bank PPI failed.

    I saw the stat that said Which? had it at 86% of all PPI claims were rejected. The one I saw didnt specify provider and included all types (obviously not PHI which is its own classification and has far better stats).

    There are a lot of cash cow insurance policies out there. Accident plans and hospital cash plans for example. Yet many of these are bought direct through mailshots. Buying a low probability of claim policy isnt a mis-sale. How its sold is where it can be and how its set up in the case of PPI.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • petermb_2petermb_2 Forumite
    1.6K Posts
    I realise our views are not too far apart from previous posts.

    My own stance comes from the fact that with the majority of loans it is the lender who chooses the insurance provider. It is the lender who receives the huge commissions and then pays a little of that commission to their introducers.

    It was, until 29th May, a racket and nothing short of. Now the FSA has banned banks from selling the wretched stuff. Not a moment too soon neither. I hear that LLoyds TSB and Barclays are appealing against that decision. Tells you everything doesnt it?
    I am a former Broker, former IFA and former compliance officer, for my sins.

    However, I have since seen the light.
This discussion has been closed.
Latest MSE News and Guides

Students - apply for uni funding NOW

If you plan to get a place via 'clearing'

MSE News

A guide to council tax bands

Lower your band & save £1,000s

MSE Guides