Legal & general mppi

saver861

Moneyineptitude wrote: »

FOS are swamped as it is, what you are suggesting is another level of adjudication BEFORE the actual decision. This would require even more qualified staff and mean complaints taking even longer than they do already.

Well as they are up to two years behind, the current system has not worked. I'm not laying out a blueprint for FOS, but as long as it is down to the cost of a stamp it is encouraging spurious claims. I would suggest it is the financial instutions and broker organisations that need to be addressing the problem. The current situation is of no help to those genuine claims lagging in the queue!

roonaldo wrote: »

The bad coverage PPI has had has led some people to believe 'Insurance must be bad'.

This is an unfortunate side effect of all the PPI saga. However, had the correct advice been given in the first place we would not be here. If it had not been challenged, banks, brokers etc would still be flogging it and making mints mostly from the vulnerable rather than the astute.

It is equally unfortunate for a genuine broker to be out of pocket due to a spurious claim as it is for a genuine consumer to have been hoodwinked into parting with their much needed cash.

dunstonh wrote: »

Where there is a genuine complaint then it should be made. However, unlike the banks where there are no consequences, when complaining against adviser/brokers, there is.

Part of the issue is that many people do not know if their complaint is genuine or no. That said, if Tesco's made a relatively minor misdemeanour on me, I'd take them on - bulldog style. If the corner shop done the same thing, I'd probably leave it untouched and find another corner shop for my milk.

dunstonh wrote: »

So, try-it-on and fraudulent complaints should not be encouraged as nothing to lose.

What is being done within the industry to stop it? Whatever it is, it would seem it is currently ineffective.

dunstonh

What is being done within the industry to stop it? Whatever it is, it would seem it is currently ineffective.

Very little as adviser cases actually only form a near insignificant number of PPI complaints. Also, there really isnt a professional body that is effective in sounding out the issues of the small adviser. Most adviser firms are like your small corner shop. They dont have any clout and are too small to be heard.

saver861

roonaldo wrote: »

I have also seen the opposite, one couple claimed £45k on a joint PPI policy, then alleged it was mis-sold. They'd be sleeping at Kings Cross station if it were not from taking PPI!

The maths of this don't seem to stack up.

If they claimed £45K I am assuming it is unlikely they paid anything near that in premiums. A successful complaint would have seen them having their premiums refunded but paying back the £45K as a result!

If they were not aware then at some point someone should have pointed out their potential loss in the event of an upheld complaint.

Nasqueron

saver861 wrote: »

The maths of this don't seem to stack up.

If they claimed £45K I am assuming it is unlikely they paid anything near that in premiums. A successful complaint would have seen them having their premiums refunded but paying back the £45K as a result!

If they were not aware then at some point someone should have pointed out their potential loss in the event of an upheld complaint.

saver861 - the point is that they were greedy, in that they took the PPI payout (doing what it was supposed to do) and then jumped on a bandwagon for PPI reclaims and tried to claim back the fees they paid for the PPI itself - even if they had won, the bank would simply have deducted the fees from how much they were already paid to see if they were owed anything and as in this case, they were not, the bank would have not given them anything back.

A different example might be someone who had single premium PPI on a loan where they claimed say £500 for being out of work for a couple of months, but as the SP policy meant they paid effectively a loan on top of a loan they might have been refunded say £1000 and been given the balance i.e. £500

saver861

Nasqueron wrote: »

saver861 - the point is that they were greedy,

as is the case with the banks, brokers, insurers, consumers, etc etc. One of the seven deadlies that inflicts a high percentage of the entire population!!

Nasqueron wrote: »

even if they had won, the bank would simply have deducted the fees from how much they were already paid to see if they were owed anything and as in this case, they were not, the bank would have not given them anything back.

That's my point - in this case it is very very unlikely premiums paid exceed the amount already claimed on the insurance, i.e. £45K. Therefore, if the complaint was upheld the bank would be looking for the return of £45K minus the amount of premiums paid. So if they had paid £10K in premiums but have claimed £45K then said bank would be looking for its £35K, in the event of an upheld complaint.

Therefore said complainants in this case would likely to have been considerably out of pocket in the case of an upheld complaint. Greedy they may have been ... blind they certainly are!

JuicyJesus

saver861 wrote: »

The maths of this don't seem to stack up.

If they claimed £45K I am assuming it is unlikely they paid anything near that in premiums. A successful complaint would have seen them having their premiums refunded but paying back the £45K as a result!

If they were not aware then at some point someone should have pointed out their potential loss in the event of an upheld complaint.

You would think so, but as it is firms - even if they uphold a complaint/have a complaint against them upheld by FOS - generally do not claw back overpaid policy proceeds. In fact I've never heard of this happening.

In general the most that will happen is any payout is deducted from the redress due and if the customer has had more paid out than the redress would be then they get nothing. They're not out of pocket, but the bank are - they have the costs of investigating a meritless complaint and potentially a £750 FOS fee.

In truth it would be fairer if any payout was clawed back - after all, by making a complaint of mis-sale, you are effectively saying that you do not think you should have had the product at all, and therefore you should be placed back in the position you were before the product was sold to you. Oddly enough, complainants in this situation often do not enclose cheques refunding the payments they strenuously believe they should never have had the opportunity to receive with their FOS forms.

Insider101

Moneyineptitude wrote: »

FOS are swamped as it is, what you are suggesting is another level of adjudication BEFORE the actual decision. This would require even more qualified staff and mean complaints taking even longer than they do already.

I don't think there is anything that can be done to deter (some) spurious claims being referred to a free-to-use service.

They can't impose a charge on the complainant as suggested by the original post you quoted as the law and FCA rules state that the respondent must pay regardless of whether it is upheld or not.

The FOS does have the discretion to rule a complaint as ""frivolous/vexatious" (i.e. an obvious try-on) and waive the case fee. I have seen case studies where they have done so, for example, in cases where a CMC has complained about a non-existent PPI policy. But generally, they are very reluctant to believe that a customer is simply chancing their arm. Plus they want their money. I think under 1% of complaints are actually dismissed in this manner.

[Deleted User]

Insider101 wrote: »

They can't impose a charge on the complainant as suggested by the original post you quoted as the law and FCA rules state that the respondent must pay regardless of whether it is upheld or not.

I know that already and I'm not sure why you quoted my post and then answered the post mine was in response to?

Insider101 wrote: »

(FOS)are very reluctant to believe that a customer is simply chancing their arm. Plus they want their money. I think under 1% of complaints are actually dismissed in this manner.

Yes and, as you say, most such rejections are where there was no PPI in the first place.




So, basically, nothing in the way FOS operates or the manner in which it is funded is going to change anytime soon.

Insider101

Moneyineptitude wrote: »

I know that already and I'm not sure why you quoted my post and then answered the post mine was in response to?

.

Sorry, was just being lazy. Posting off my phone and couldn't be bothered quoting both separately ;-)

saver861

Insider101 wrote: »

They can't impose a charge on the complainant as suggested by the original post you quoted as the law and FCA rules state that the respondent must pay regardless of whether it is upheld or not.

The whole PPI thing is an exception to the regular workings of financial services and complaints etc. Therefore, it may be as things return to the norm, the current model is sufficient to continue.

Maybe that's unfortunate for those brokers and IFA's as well as those with genuine complaints being held up by try-it-on complaints. One thing is for sure, as long as it remains the cost of a stamp, the try-it-on's will continue - not rocket science.

Insider101 wrote: »

The FOS does have the discretion to rule a complaint as ""frivolous/vexatious" (i.e. an obvious try-on) and waive the case fee.

Which does redress the balance a little, financially at least.

Insider101 wrote: »

I have seen case studies where they have done so, for example, in cases where a CMC has complained about a non-existent PPI policy. But generally, they are very reluctant to believe that a customer is simply chancing their arm. Plus they want their money.

When you say "they want their money" ... do you mean the FOS? That is to suggest that they may be disinclined to reject claims or waive fees, because they have a vested financial interest in collecting the fees? Hardly transparent then ....

How is the FOS funded? The reason we have a police service is to reduce crime. If, hypothetically speaking, they were 100% successful and eradicated crime, most police officers would be out of a job! Increasing crime rate = police job security!

While obvious spurious complaints are not to be encouraged, I think many financial proessionals bemoaning the fact it happens don't really have my sympathy. The financial sector is to blame for the occurrence of PPI anyhow, and it would seem it is their failings the spurious claims are not dealt with more effectively. Sort it or put up with ...