MSE News: A confession: I've mis-sold PPI

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  • Consumerist
    Consumerist Posts: 6,310 Forumite
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    dunstonh wrote: »
    . . . So, whilst the banks may have told lies and mis-sold. Many consumers are just as happy to tell lies and make fraudulent complaints as the opportunity arises. To assume just one side is the big bad is wrong. . .

    You seem to imply that it's ok for the banks to try it on with customers but it's not ok for the customers to try it on with the banks.

    Sounds a bit one-sided to me. ;).
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • dunstonh
    dunstonh Posts: 116,655 Forumite
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    You seem to imply that it's ok for the banks to try it on with customers but it's not ok for the customers to try it on with the banks.

    Sounds a bit one-sided to me. ;).

    Which bit of my post says that?
    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.
  • pompeyfaith
    pompeyfaith Posts: 536 Forumite
    edited 3 May 2011 at 3:58PM
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    The way the banks sold the products over the years leaves little to be desired. The problem is that is is backfiring on those that havent mis-sold. Our compliance company has said that around 1/3rd of the complaints they are getting now are try-it-on complaints rather than genuine complaints.

    You now have people that think they have PPI when they dont and stick a complaint in. You also have others that think insurance is a bad thing even when the insurance is not PPI or if its is PPI but suitable.

    Whilst the big faceless corporates can get away with complaints, the small local firms end up paying for it as the insurance premiums we pay are based on claims history and some individuals could find themselves sacked and unable to get a job as their complaints record of individuals at that level can follow them around (the basis of no smoke without fire can be just as damaging). Plus, if they go to the FOS (which many do) the small local firm suffers a £500 charge even if the complaint is rejected. Too many of those could put a small local firm out of business.

    So, whilst the banks may have told lies and mis-sold. Many consumers are just as happy to tell lies and make fraudulent complaints as the opportunity arises. To assume just one side is the big bad is wrong.

    Where someone has been mis-sold they should complain. Where someone has not been mis-sold they should not complain.
    Dunstonh,

    Whilst I agree that some claims maybe fraudulent I do not agree that it amounts to as high as you stated, the problem here is because many consumers simply do not know that they have been paying for the policy indeed on many agreements it is hidden and not written as a multiple agreement as it should and as many consumers are not maths savy or are of limited mental capacity it is not noticed by them.

    So in sort the word lies is a bit strong, no one is to blame but the financial industry as a whole. Had they put there hands up and came clean a lot sooner this would not be in such a confusing state it is in now.

    With the just JR Judgment the financial industry has been caught with there trousers down but still they do not come clean, but instead hide behind the BBA and there Solicitors in the hope it will all go away.

    Small Businesses have sold this defunct product as well as Big Businesses putting fat profits and bonuses before the concerns of the consumer.

    Treating Customers Fairly comes to mined and sadly that went out the door.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
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    MSE_Martin wrote: »
    one of the major categories of misselling PPI (not in guys piece) was adding it without telling people. Lieing that it was compulsory or indicating they would be rejected from the loan without PPI.

    That type of misselling isn't let the buyer beware - its fraud

    I agree with Martin that this is fraud. It is therefore a crime and should be treated as such by the FSA which has a statutory objective of combating financial crime.
    dunstonh wrote: »
    whilst the banks may have told lies and mis-sold. Many consumers are just as happy to tell lies and make fraudulent complaints as the opportunity arises. To assume just one side is the big bad is wrong.

    I agree with dunstonh that this is fraud. It is therefore a crime and should be treated as such by the FSA which has a statutory objective of combating financial crime.

    dunstonh wrote: »
    Where someone has been mis-sold they should complain. Where someone has not been mis-sold they should not complain.

    So they should. I also do not have a problem with somebody checking what they bought or challenging the advice they were given - only that they tell porkies.
  • dunstonh
    dunstonh Posts: 116,655 Forumite
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    Whilst I agree that some claims maybe fraudulent I do not agree that it amounts to as high as you stated, the problem here is because many consumers simply do not know that they have been paying for the policy indeed on many agreements it is hidden and not written as a multiple agreement as it should and as many consumers are not maths savy or are of limited mental capacity it is not noticed by them.

    With credit cards, store cards and loans the figures of mis-sale are staggeringly high. Sales targets with "sell or your sacked" pressure and unqualified staff with little training certainly are high on the reasons. However, that's a different world from full advice firms.
    So in sort the word lies is a bit strong, no one is to blame but the financial industry as a whole. Had they put there hands up and came clean a lot sooner this would not be in such a confusing state it is in now.

    Financial industry as a whole is not responsible for this. Yet it is the whole that is taking the flack.
    Small Businesses have sold this defunct product as well as Big Businesses putting fat profits and bonuses before the concerns of the consumer.

    Small businesses mostly only get involved with MPPI. Even the FOS recognise that MPPI has much lower failure rates. Still not perfect by a long way and not enough to be complacent (single premium MPPI for example has long been classed as bad - i remember telling someone over 10 years ago to complain about it). However, the small firms are suffering with try-it-on claims. Last year I had a young mortgage adviser tell me about a complaint he had. It was his first one and it was a template letter from a claims company about PPI. The template letter was just a list of every hypothetical reason (including not needed, had savings to cover it, went past retirement - none of which were true). The mortgage adviser had not recommended PPI and the person had not taken it out. Complaint was quite rightly rejected but the claims company referred it to the FOS. The mortgage adviser then suffered a £500 charge. Being young and relatively new he doesnt earn that much. So, the £500 charge hurt. Plus, his confidence was shattered. I swear he was close to tears. I can understand that too. When you are personally responsible for the advice you give and it comes out of your pocket if wrong, these sorts of try-it-ons hurt you financially and personally. If you are just a bank clerk who or shop assistant who has no liability for what they sell then why should they care. They can mis-sell as much as they like. So, don't mix up those in the industry that have liability and responsibility with those that do not.
    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.
  • ~Brock~
    ~Brock~ Posts: 1,710 Forumite
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    dunstonh is correct when he speaks of fraudulent PPI refund claims, but this is not consumers 'trying it on' against banks, it is the claims companies themselves.

    These firms exist only to maximise their income. They do not care if a complaint has merits or foundation, or even if the product was sold in the first place. Standardised text is used regardless of the individual circumstances of the sale (if indeed there was a sale).

    Unfortunately, the current system is geared towards complainants in the sense that the financial burden of FOS fees is fairly and squarely laid at the door of the firm being complained about. This means that CMCs can make as many unfounded complaints as they like with complete financial impunity.

    Until a solution is found to this situation, and the obvious one is for FOS to make a charge to a CMC where a complaint is not upheld....after all as 'claims professionals' they should know if a compalint has got legs or not.

    That would soon not only get them to sharpen their pencils but would also reduce the unneccessary burden on FOS being brought about by try it on complaints, which would only be good news for genuine complainants.
  • Alpine_Star
    Alpine_Star Posts: 1,354 Forumite
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    I agree with dunstonh that this is fraud. It is therefore a crime and should be treated as such by the FSA which has a statutory objective of combating financial crime.

    Since when have the FSA regulated the public?
  • Alpine_Star
    Alpine_Star Posts: 1,354 Forumite
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    ''Three or four years ago, as the PPI storm clouds were beginning to gather, the All Party Parliamentary Group on Insurance & Financial Services held a joint dinner with Alliance for Finance, a federation of trade unions with members in the financial services sector. One of the issues raised by the trade unions was how the counter staff in banks were being set unrealistic targets for sales of PPI, targets that they were adamant could be reached only by mis-selling the product. This shocked the MPs at the dinner and probably, at least partially, explains why very few political voices are raised in support of the banks on this issue.''

    http://blog.appgifs.org.uk/2011/05/banks-should-pay-up-the-ppi-co.html
  • Nessie23
    Nessie23 Posts: 245 Forumite
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    hieveryone wrote: »
    I've worked in a bank call centre in the past also in their credit card department, and my experience matches this. I knew then, at 20 years old, that it was wrong and refused to put on the hard sell. Needless to say I was sacked.

    This article and the following shows the lack of ethics of these big banking corporations. Makes you wonder why it took so long for the FSA to sort this out.

    Brave article from Guy MSE, thanks for sharing your experience and showing us what it was like at the time from inside.

    Nessie
  • niamhirl
    niamhirl Posts: 41 Forumite
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    Jonbvn wrote: »
    I think the pressure by sales people to purchase extended warrantees for some products does bear some realistic comparison to PPI misselling.

    I recall buying a US style fridge at well known electrical chain. When I refused their extended warrantee, the sales staff and manager were quite snarky - no doubt because there was no commission for them!

    I had a similar experience when buying my washing machine 7 years ago. The machine cost just under £300 pounds but the total on my receipt was over £500. I luckily noticed this before I signed it the agreement and was told that was the extended warranty. I explained that I didn't want the warranty and the sales person tried to persuade me otherwise. When I still refused he told me that the store manager would have to be called to complete the sale as he was not allowed to complete a sale without the extended warranty. I went through the same rigmarole with the manager and told her if she didn't stop hassling me regarding the extended warranty I would take my business elsewhere. At this point the sale was completed, the washing machine is still working 7 years later and I never paid a penny in extended warranty fees.

    Also 6 years ago I also took out a loan to pay off overdraft and credit card debts etc, PPI was never mentioned to me when I was arranging the loan over the phone but once I got the agreement I noticed that insurance had been added. I phoned the loan company and to be fair the removed it and sent me a new agreement to sign.
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