MSE News: Banks lift PPI hold: complain or risk missing out

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"It is estimated three million victims could be due a combined £9 billion in PPI compensation, so carry on complaining ..."

Read the full story:
Banks lift PPI hold: complain or risk missing out

2sides2everystory

The side to this story that is really annoying me this evening is the suggestion that the wider customer base will have to stand the costs of the billions in compensation now being forecast.

Let's scotch that straight away. If the banks start trying to shift this cost on to customers through lower savings rates and higher bank charges then they should be stopped in their tracks by the government.

They creamed off the billions as high octane immediate and even advance contributions to bottom line profit and have had the use of the money for years. Now they can pay it back, plus interest, plus compensation, at their own cost.

Else, has been well implied by beamerguy in the towel thread here we should tackle their directors for blatant fraud in deliberately directing the misselling.

Consumerist

2sides2everystory wrote: »

If the banks start trying to shift this cost on to customers through lower savings rates and higher bank charges then they should be stopped in their tracks by the government.

The banks are a tax cash cow for government; they (government) have and will do nothing to stop the banks doing whatever they want to generate tax revenue. The banking levy was back-door taxation and this is a tax giveaway to fund a recovery to a sick economy.

patman99

On the news they said Banks would have to automatically trawl their customer databases and issue refunds without the customer even having to contact them. This means that without writing one letter of complaint, people will be getting their money back.
Personally, I took-out PPI on each credit card and loan and mortgage I ever had. I stand to gain quite a good payback, however, I would like to see a rule put in place that states you can only get your PPI back if no claim was made against it during the period it was in force.

In principle, if I received a refund from my PPI providers covering my mortgage, as I claimed off it, I would shred the cheque as I would see it as immoral to do otherwise. As for the PPI's I did not claim from, then I would welcome the refund with open arms as I would see it as a refund on an unused insurance.

Consumerist

patman99 wrote: »

Personally, I took-out PPI on each credit card and loan and mortgage I ever had. I stand to gain quite a good payback, however, I would like to see a rule put in place that states you can only get your PPI back if no claim was made against it during the period it was in force.

If a successful claim was made then it is highly unlikely the PPI was mis-sold. In those circumstances any claim for mis-selling would fail anyway.

dunstonh

Let's scotch that straight away. If the banks start trying to shift this cost on to customers through lower savings rates and higher bank charges then they should be stopped in their tracks by the government.

They have to get the money somewhere. Shareholders will see some loss reflected in the share price (dividend is unlikely to change). That means the rest comes out of operating income. That comes from customers.

The taxpayer will cover around 20% of it as well through lost taxation.

however, I would like to see a rule put in place that states you can only get your PPI back if no claim was made against it during the period it was in force.

What about all those people that want PPI?

It is not the product that is at fault. it was how it was sold and set up.

2sides2everystory

Consumerist wrote:

If a successful claim was made then it is highly unlikely the PPI was mis-sold. In those circumstances any claim for mis-selling would fail anyway.

You might think so, eh? (Fairs fair and all that?) But how many people who claimed successfully were nevertheless unpleasantly surprised when they found their claims were reduced because they had to keep paying the premium, like motor insurance, for example? You and I might not have been surprised. But did anyone tell the punters ahead of the event (or more importantly, ahead of the PPI sale)? All quite debateable isn't it?

dunstonh wrote:

What about all those people that want PPI? It is not the product that is at fault. it was how it was sold and set up.

Yeah but you know better perhaps, because didn't you already share this weekend that you've only ever sold three PPI policies in your long career? Usually there's a better way, isn't there?

dunstonh

Yeah but you know better perhaps, because didn't you already share this weekend that you've only ever sold three PPI policies in your long career?

Thats because I tend to deal with investors and higher net worth clients.

Loan and credit card PPI is fairly straight foward as most of those are sold when not wanted or front loaded on the loan and charged interest. However, what about MPPI? That has nowhere near the failure rate. This website is full of posts every week from people looking to buy it. It probably is the only suitable PPI going.

2sides2everystory

Well a proper discussion about mortgage payments with a specialist does give an opportunity more obvious than most to discuss what happens if you can't pay, but MPPI has its limits too doesn't it? How well covered for example are MPPI clients who started their mortgages during record BofE Base Rate lows if they should lose their jobs after mortgage rates increase considerably? Will the MPPI monthly benefit levels keep up with the new increased mortgage monthly payments? Are the premium rates fair?

With Credit Card PPI we have had a blatant cartel on PPI rates - the rates are actually meaningless other than the fact they are way more than enough to guarantee horrendous profits. They haven't changed because change would draw attention - so instead they have become "officialised" by inertia. I am sure that the lack of any change means the bankers and associated PPI insurers (mostly bank-owned now anyway) have long believed in the standard advice to stand perfectly still out in the jungle if you are being surveilled by a predator that can run faster than you. Perhaps many of those sharp-eyed MSE-briefed customers might have walked on by until recently :rotfl: rather than have run up the main steps to the CEO's office before he could slam the door

It seems the roar of the masses has teased out the CEOs from their hides. Now watch them carefully - they are not like us.

brewerdave

2sides2everystory wrote: »

Well a proper discussion about mortgage payments with a specialist does give an opportunity more obvious than most to discuss what happens if you can't pay, but MPPI has its limits too doesn't it? How well covered for example are MPPI clients who started their mortgages during record BofE Base Rate lows if they should lose their jobs after mortgage rates increase considerably? Will the MPPI monthly benefit levels keep up with the new increased mortgage monthly payments? Are the premium rates fair?

As an aside I had MPPI with my home loan with Nationwide a few years ago and actually successfully claimed on it when I was made redundant ...but it was for a fixed amount £££s per month, not the actual total repayment so wouldn't vary with interest rate. Thought most MPPI policies would be on that basis??

dunstonh

brewerdave wrote: »

As an aside I had MPPI with my home loan with Nationwide a few years ago and actually successfully claimed on it when I was made redundant ...but it was for a fixed amount £££s per month, not the actual total repayment so wouldn't vary with interest rate. Thought most MPPI policies would be on that basis??

Like most policies, the features and options you get from different providers can vary. Some will only pay out the mortgage plus 25%. Others will pay out a fix sum. So, both types exist.