Everybody likes a tale of good triumphing over evil, heros against villains, truth against lies, Christmas pantomimes and all that. And there has been no greater pantomime than the British banking industry over the last 12 months. From mis-sold PPI and unfair bank charges to dodgy investment advice, million pound bonuses and those individuals that stood against the tyranny.
So, indulge in some ‘he’s behind you’ story telling as we look at This Is Money’s ‘Financial Heroes and Villains of 2009‘.
It’s been a decade of financial disarray across the industry that’s seen endowments mis-sold, payment protection insurance mis-sold, unfair bank charges levied and court cases lost and won. When it comes to mis-sold PPI, this scandal has grown and grown to encompass more and more companies. Countless investigations have found that providers are mis-treating customers and as a result, more than 10 firms, including EGG, Alliance & Leicester and Capital One, have been fined.
Despite all the bad press, regulator pressure and consumer complaints, the less than satisfactory standards continue. It was only as recent as November that some providers agreed pay PPI compensation to their customers. Lets hope for a fairer, better regulated 2010.
It’s the end of the year, a time to take stock and buy lots of presents and other stuff, all of which means you may realise you’re skint. So, what do you do about it? Well, a new year’s resolution may be a good place to start – ‘Spend less, save more’ or something like that. But if you fancy some advice on how to bring in more cash and control what you’ve got, check out this 5 step plan to clear debts from the Telegraph. Merry Christmas!
Surprise, surprise – recent figures from the Financial Ombudsman (FOS )show that banks and other insurance providers are still failing to deal with payment protection insurance (PPI) complaints from their customers.
In an optimistic statement earlier this year, the banking industry Ombudsman predicted the number of PPI claims would fall from around 30,000 to 25,000. But now we’re at the end of the year we can see that complaints have instead hit a record high of 45,000 which is a 45% increase on last year. In total, the FOS is dealing with over 800 complaints a week from financial customers about getting their unfair payments back.
The recession has resulted in an incredible amount of people becoming unemployed and many of these people have been forced to use their Payment Protection Insurance (PPI) policy to keep their loan repayments up. For them, the PPI is worth it’s weight in gold but for policy holders still in work and not claiming, PPI has become a weight around the neck.
The increase in claims due to unemployment has resulted in a 35% rise in the average monthly cost of PPI throughout 2009 meaning that stuggling borrowers are paying considerably more for cover. This extra money helps the banks, lenders and providers off-set all the PPI claims that are being made and costs the average UK household an extra £110 over a year.
Payment Protection Insurance (PPI) – When you didn’t need it, you were paying for it and now you need it, you can’t afford it. Sound familiar? Thosands of homeowners across the UK are facing the dilemma of needed to spend a little more every month to pay for Mortgage Payment Protection Insurance (MPPI) incase they lose their job.
There’s no hiding that PPI has had a very bad time of late with mis-sold PPI being the main reason. But with a recent Fitch Ratings report showing that 15% of prime mortgages are in negative equity, appropriate PPI has never been a more attractive proposition.
Over the past 24 months, the reputation of Payment Protection Insurance (PPI) has sunk lower than any reality TV show. From mis-sold PPI and Single Premium policies to forced cover and worthless payments, things have never been so bad for the industry. The thing is, it’s the human element that has ruined PPI because as a correctly sold insurance product, it’s a very useful and worthwhile purchase.
So it was only a matter of time before an insurer came along and started putting the customer first and in turn giving PPI some credibility back. This insurer, or at least the current one, seems to be Select and Protect as they’ve seen a 90% rise in sales of their Mortgage Payment Protection Insurance (MPPI) policies. Their secret? Keep it simple, useful and competitive by the looks of it. Oh and let the customer decide if they want it or not.
Now all we need is the rest of the providers to do the same.
Here’s a little interesting piece of research conducted by home insurance company Liverpool Victoria. They’ve discovered that; due to mass unemployment, the British Public will spend an estimated £132 million this Christmas on ‘black market’ goods. It’s a fascinating insight into consumer behaviour in times of hardship and will no doubt leave legitimate retailers feeling rather bitter.
Now, some of you may be asking ‘what does this have to do with PPI claims and refunds?’ and the answer is: ‘absolutely nothing’, but you’ve got to admit – it’s an interesting point. Of course, the large scale unemployment means that banks and policy providers are currently covering more repayments than ever before, which in itself will be a welcome Christmas present for many.
The cost of PPI cover is on the up due to rising unemployment. Regular Payment Protection Insurance and Mortgage PPI has seen an increase in premium costs due to more home-owners finding it difficult to make repayments.
The rising unemployment levels, which are expected to reach 3 million, the continuous PPI claims that are being paid out and the pressure on insurers to bring in more money for their parent companies who are lending less due to the recession, will only continue to boost insurance costs. This only goes to back up the Financial Services Authority’s decision to ban the sale of PPI alongside borrowings to increase competition and reduce costs.
As you may know, in September of this year the The Financial Services Authority (FSA) began a consultation regarding the new guidance proposals concerning PPI complaints. The proposals are designed to improve the fairness of complaint handling but the FSA has now delayed plans to order policy providers to look again at over 180,000 rejected PPI compensation claims.
The rejected claims were to be re-opened and assessed again this year under the new guidance but after a large number of questions and complaints about the proposals, the FSA has put this process back to 2010. It’s a set back for many who have had their PPI claim rejected, but that’s all it is and there’s a good chance the re-assessment will happen next year.
We know that you have a choice when it comes to making PPI claims, so why should you choose us?
