PPI Churning

edited 30 November -1 at 1:00AM in Reclaim Bank & Credit Card Charges
7 replies 2K views
fraziolafraziola Forumite
24 Posts
Hi

I've just received a call from a company call Brunel Franklin who told me that I could be own even more from my previous PPI claim (I claimed way back in 2008 via a claims company - yes I know... should have done it myself!!!) because the credit card company probably 'churned' my account and I'm probably owed a lot more. They asked if it was ok to send me some forms so they could do a Data Access Service Request on my behalf... obviously for a % fee.

Anyone know what churning is, and can I find all this out for myself instead of paying someone else?

ta

Replies

  • [Deleted User][Deleted User] Forumite
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    Nonsense. Don't fall for it.
  • edited 16 September 2014 at 8:28AM
    dunstonhdunstonh Forumite
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    edited 16 September 2014 at 8:28AM
    PPI Churning

    PPI cannot be churned as it has no investment value. Churning is where an investment is sold and another bought in its place resulting in repeat commission and the only reason for doing it is the commission (and no other justification). Genuine investment switches are not classed as churning.

    E.g. the sale of an endowment with high initial charges surrendered say 5 years later and a new one started in its place. The new one going through another initial charge period with the old one suffering surrender penalties. That is churning.
    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.
  • fraziola wrote: »
    Hi

    I've just received a call from a company call Brunel Franklin who told me that I could be own even more from my previous PPI claim (I claimed way back in 2008 via a claims company - yes I know... should have done it myself!!!) because the credit card company probably 'churned' my account and I'm probably owed a lot more. They asked if it was ok to send me some forms so they could do a Data Access Service Request on my behalf... obviously for a % fee.

    Anyone know what churning is, and can I find all this out for myself instead of paying someone else?

    ta

    Anyone know what churning is?
    Perhaps that is a question you should have posed to the person who contacted you ;)

    Well it seems like from the answers already given, you've no chance of doing this yourself.

    But remember that 50% of something is better than 100% of nothing :)

    So, if they only want a % of anything they are now able to recover since you've already made a successfull in the past (I doubt they only want a percentage, but I am advising purely on the information you have given, but is perhaps something else to double check with the person before proceeding) then let them go ahead

    Based purely on what you have told us, and the other responses given, then it appears to me you've nothing to lose :)
  • Churning can apply to any financial services product and is not limited to investments. PPI was churned by advisers selling a series of loans and on each one they replace the existing policy with a new one based on the fact that you are older and in some cases people sold a series of single premium PPI plans rolling the cost into each new loan.

    It looks like the original claim company has sold your details on to Brunel and they are trying to generate some new business. A bit of research on here should be enough to do it yourself and if you do think you need a company find one that charges a lot less than BF who take a whopping 39.6% of anything you get back.

    You can get a SAR for £10, just write to the original loan company. If you go ahead with BF I am sure they will send you a copy of T & Cs to sign and you will be committed to pay their fee if you don't cancel within the 14 day period. Given that most SAR's take longer than 14 days to complete it is very easy to fall into this trap.
  • Churning can apply to any financial services product and is not limited to investments. PPI was churned by advisers selling a series of loans and on each one they replace the existing policy with a new one based on the fact that you are older and in some cases people sold a series of single premium PPI plans rolling the cost into each new loan.

    This is incorrect. Yes, you can churn any product. In the scenario you present, the loans may well have been churned. The new one would have a cheaper monthly payment simply because the payment period is longer, so you pay more overall.

    However, the PPI would be sold to match the new loan. If a monthly premium, that would be correct (assuming cover was appropriate in the circumstances), whereas the old policy may no longer be.

    You are also incorrect to suggest that the premium will be higher because the borrower is older. PPI is rated by reference to the amount of regular payment in the event f a claim is made, length of possible claim period and the insurer's view of economic conditions (and how likely this is to produce a redundancy claim). There is no reference to age (provided they are under the maximum age for which cover will be provided), or what the policyholder does for a living. Nor is there any reference to health other than to exclude pre-existing conditions.

    It looks like the original claim company has sold your details on to Brunel and they are trying to generate some new business.
    Possibly but both companies needed consent to do that.

    The OP should be aware that the original company may still have a valid contract that it can enforce to take a share of the spoils if they DIY or get somebody else to do it for them (so that they end up paying twice).
  • Thanks Everyone for the responses.

    I think I'll give Brunel Franklin a miss. I've already got a SAR for this credit card (egg card) and I believe I've received all the PPI compensation I'm entitled to. I guess the main point I was trying to ascertain was if there was any truth in the suggestion from BF that my PPI refund could have been less than what it should have been due to some sort of financial trickery. The girl did actually mention the original claims company and said they were working in partnership with them. I think, as another poster said, the original claim company sold my details to BF and they phoned me to drum up some business (she asked if it was ok to pass my details to another financial services company, which I declined). I was just intrigued by her claim that I could be owed more (perhaps a little greedy of me) because of a financial trick, whether churning is the right tern or not I don't know.

    Thanks again
  • [Deleted User][Deleted User] Forumite
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    fraziola wrote: »
    I believe I've received all the PPI compensation I'm entitled to.
    So do I. See post #2
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