Payplan cover my payments scheme a con!

hollyivy12

Please see my first thread below. just to let the people who have had similar problems with payplan know what has happened so far.

We forwarded the complaint to the FOS who have replied and basically said that as the Cover My Payments Scheme is not called an insurance of any kind and not covered by the FSA then they are perfectly in their right to sell the policy to you and it is not miss-sold. in other words you cannot claim your money back like a PPI.

Its unbelievable as its so obvious they are getting away with ripping people off who are at their most vulnerable. Really they are even worse than the banks as they are supposed to be helping people get out of trouble not add to it. We did appeal it but got knowhere.

Surely something can be done about this? I am just so angry they are getting away with it but what can we do? Does anyone have any knowledge of finances where we could go from here? I am just so shocked that the FOS cannot see the wood for the trees.

I did forward this to Martin Lewis to ask the question but it has probably got lost in the masses of queries. Any advice or help please would be apreciated. We must try to do something about this rogue outfit! thanks

Diane



Are payplan miss-selling policy? Please read could this be happening to you too?!
My partner ran in to financial difficulty in 2007 and was referred to Payplan by his bank at the time Lloyds TSB. He agreed to pay £600 each month directly to Payplan who would then distribute the money to the creditors. They also advised him to join their Cover My Payments Scheme which would be a small percentage per thousand, but at the time because he was in such a state with worry and stress he would have agreed to anything if someone could help sort his situation out and get Lloyds off his back. They never at any point asked him about any insurance policy’s he had in place at the time.
Some months later he started getting letters from a few of his creditors stating charges were being added onto his account for late payments. When he contacted Payplan he realised that they did not always pay on time and so he started checking his account on their website Justabank. Up until this point he had naively completely trusted them to manage his debts. He is not very good with finances so I had a look at his account and noticed that out of the £600 he was paying them monthly that only £570 was going to the creditors, so the other £30 was paying for this scheme as they call it. Basically depending on the clauses the scheme is to cover the payments made to the creditors if you come out of work or are sick like a PPI, so as far as I can see is also a type of insurance although they state that it is not. By this time he had paid £600 into the scheme which could have paid off two of his debts, so I told him to cancel it immediately as having three payment protections on his two loans and credit card, life insurance and pensions in place he definitely did not need it.
Since all the information has come to light about the mis-sold payment protections and the antics of the banks he has applied for a couple of PPI refunds including the £600 he paid to Payplans ‘Cover My Payment Scheme’. As expected Payplan knocked it back sticking to the ‘it’s not an insurance policy’ excuse so he forwarded all the details on to the Financial Ombudsman. The ombudsman replied last week stating that the policy is not an insurance so is not regulated by the FSA, so they will not force Payplan to refund his money. He intends to appeal the decision as its obvious there is something not right about this whole situation or is it a loop hole or the fact Payplan are in cahoot with the bank?
Firstly the fact that Lloyds advised him to go to Payplan in the first place should raise an eyebrow. If he did stop working while he was still paying into the Payplan scheme, then the scheme would continue paying his payments to the creditors and then the bank would not have to under the PPI policy’s he already had in place. In a nutshell he was basically paying for the same service twice does this not seem dodgy in its self? What is appalling about the whole situation is that Payplan are supposed to be helping people in terrible financial difficulty, but are for this reason in fact worse than the banks! This scheme would obviously benefit a person who had no insurance policies in place but obviously not in my partner’s case, therefore it was defiantly mis-sold to him. He certainly could not afford it on top of all the debt he was in but this was not taken into consideration either. Unbelievable! On the Payplan website it says protect you payments by joining their ‘Cover My Payments Scheme’ – this is not an insurance policy – then what is it doing? Then they have house insurance called ‘Cover My House Scheme’ also car insurance called ‘Cover My Car Scheme’. Is it me or is this not fishy?
I would be interested to hear if anyone else is in a similar position with Payplan. Surely someone else has noticed that they are ripping people off like the banks? I would like to know what’s going on and why they are getting away with it or what can be done about it if anything? Sorry this is so long winded! thanks

Diane

Medoza

I have been advised by Payplan to consider taking out the "Cover My Payments" cover (which is not insurance cover, and not miss-sold, since it breaks no law) at £6 per £100 paid through an IVA.

My question is to anyone who can advise, is this type of arrangement advisable (I totally understand why it is offered since Payplan are funded by and act on behalf of creditors to ensure as much is paid back to creditors through the term of Debt Management Plans [legally unenforceable] and Individual Voluntary Arrangements [legally enforceable])?

Would alternative (more expensive?) insurance cover be more worthwhile - covering my income, not this sole IVA payment, since the Payplan arrangement is actually only set up to ensure payments to creditors are maintained?

I have tried to find advice online for this, but have found nothing.

Anyone any ideas, advice or guidance?

NB: One question I asked of Payplan before my IVA commenced was that of who is deemed a priority in terms of payments? E.g. Mortgage, Maintenance payments for my children, utility providers, council, creditors (through Payplan)...? From what i was told, the most important recipient in the mortgage lender.

nancyjim

I just spoke to Payplan and hit the same issue. He said it is more a membership scheme which is crap. Everything about this cover scheme sounds like insurance to me, they've just put a different name to it.

Hopefully one day they'll also crack down on these.