'"Wish I'd been stupid enough to get PPI in the first place"' blog discussion

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Comments

  • oldvicar
    oldvicar Posts: 1,088 Forumite
    MSE_Martin wrote: »
    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.
  • 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
    dunstonh Posts: 116,252 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    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.
    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.
  • pineapple
    pineapple Posts: 6,931 Forumite
    Name Dropper First Post First Anniversary
    Dave_save wrote: »
    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? :T
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