The claim was brought by Stephen Pattison and Katrina MacKay. Pattison and MacKay took out a £11,000 loan in 2006 with Welcome Financial Services. The £2,868 loan included a PPI package, accident plan and life coverage. The amount of the loan was nearly £30,000 which was to be paid off over the course of 15 years.

However, the terms of the PPI and life coverage did not cover the entire term of the loan. The PPI terms only covered the first three years of the loan.

Pattison and MacKay issued a complaint with Welcome Financial Services, which subsequently denied the claim. The clients brought the case to the Financial Ombudsman Service two years after the loan was signed.

The representative overhearing the complaint upheld it. In the meantime, the bank stated that it intended to make a goodwill gesture. Welcome offered to withdraw the PPI and life insurance obligations. However, in the process they also stipulated that the clients would have to pay a newly calculated rate that was 1.4% higher. The customers objected, as their current rate already exceeded 20 percent.

Pattison and MacKay brought the complaint to the FOS, asking for their feedback on whether or not it was fair. However, the FOS stated that that would have to be treated as a separate complaint.

The clients have been waiting for a decision for three years. According to an update they received from the FOS in December, they may have to wait another year before they receive a judgment. A spokesman recently stated that the decision should be resolved within the next two months, but they could not commit to an exact time-frame.

The clients are very disappointed with the outcome and insist it is not what they expected when they filed a complaint with the FOS. They feel that they have been taken advantage of by Welcome Financial Services and are not receiving justice as they expected.

The FSA said the payouts were included by 16 different firms, but did not disclose their names. Collectively, these firms were responsible for more than nine out of ten of all PPI claims made in the first half of 2011. The banks attempted to appeal the decision binding them to repay claims at the beginning of the year, which froze their obligation to repay the debts to consumers. However, the High Court ruled against them in April and the banks were forced to begin paying restitution to all consumers who were mis-sold payment protection insurance.

The Financial Services Authority and Financial Ombudsman Service expected the number of PPI claims to decline after the ruling. However, the number of claims in the last three months of 2011 reached a new record.

Litigators cannot ignore the possibility that some customers have exploited the new trend in PPI claims. Although more claims are being made, not as many rulings are made in favor of customers. Therefore, some claims may be raised without cause.

Nonetheless, changes in the business practices of banks cannot be ignored either. Even though the success rate of customers making PPI claims has fallen to 65%, the FOS has clearly decided that the PPI scandal continues to persist.As more banks are looking to balance their own books, they have turned to a number of unconventional practices. These practices have included instituting a number of new fees. Evidently, a surge in PPI missellings are also a possibility as well as banks struggle to come up with additional funds.

The new claims continue to create a burden for the Financial Ombudsman Service, as they remain that sole regulator for overhearing them. PPI claims have now exceeded 54% of the FOS current caseload, which is likely to create a number of additional complications for them over the coming months.

According to a post in BBC, the surge in PPI claims suggests that the banking industry still has to make a substantial amount of progress as it struggles to get the PPI scandal under control. To date, the largest banks in the UK have been forced to set aside over £6 billion for customers who have been victimized by the scandal.

Over 75% of the PPI claims handled by the FSCS were brought by expert claims handlers (such as us!), revealing that the large majority of people prefer to let a specialist take care of their claim. It’s no surprise really, considering that we pay experts to do things for us each day, whether it’s prepare our food; service our car; fix our boiler or put clothes on our back – we pay people because we don’t have the time or inclination to do it ourselves.

The FSCS has refunded £77.5 million in PPI payments over the last decade

The FSCS figures also put the average PPI refund on a claim made through a claims handler at £4,534 and revealed they have refunded £55.6 million in mis sold PPI payments between 2008 and 2011. This is a fraction of the total amount refunded to mis sold policy holders as the FSCS only deals with refunds where the issuing company has gone bust.

Perhaps most interestingly, the report shows that the success rate for claims made through a specialist company is 87% compared to 83% for those made by the individual alone. Speaking about this, Mark Neale, chief executive of the FSCS, said: “People may well think they increase their chances of getting their money back but that is not necessarily the case. Of course, some people may prefer to pay someone to submit their claim for them.”

The FSCS has paid out more than £26 billion to 4.5 million people over the last 10 years, including £77.5 million for PPI claims, so if your PPI policy provider has gone bust you can get reliable advice and information through the FSCS website. If you want to find out if you can make a claim or you would like to get one started, here’s our freephone number: 0800 840 7292 (or arrange a call back). Get in touch and we’ll help you get some answers, no sales talk and no obligation guaranteed!

As concerning as that number of claims is, it only represents a third of al the claims received over the course of 2011. Many experts are concerned that nearly 100,000 PPI claims have been issued over the past year.

Although the number of claims issued increased substantially, not as many are being successfully raised by consumers. Between July and September, almost all of the claims that were raised were made in favor of customers. In more recent months, only a little more than two-thirds of these claims were made in the customers behalf.

The growing number of concerns continues to raise some questions over the practice of using PPI claims by large financial institutions. About 6.5 million PPI packages are issued each year. However, almost 1 million people complained with banks and other financial institutions last year about the way those claims were sold or how they were structured.

The Financial Ombudsman is concerned about how much it costs to handle all of the PPI cases coming to its desks. Therefore, it has proposed issuing a fee for all firms receiving more than 25 cases each year. This fee would include both a supplemental and standard case fee, which would collectively amount to £850.

According to the chief financial ombudsman, the Ombudsman is facing steeper expenses over handling these PPI claims than ever before. They are going to have to find a way to manage them, as the PPI caseloads over the course of 2012 and 2013 are expected to make up 60% of the cases they Ombudsman has to oversee. It is estimated that they will need to deal with approximately 165,000 PPI cases over the course of the next two years.

However, she cautions that there is no way of predicting exactly how many claims they are likely to receive over the next couple of years. That figure could be significantly higher or lower, depending on trends with PPI and developments in the market.

A former considerable Tory party donor, Asil Nadir arrived at the Old Bailey this morning on charges of stealing £150m from PPI

The case was originally brought to court in 1993 but the accused fled to Cyprus and could not be extradited back to the UK to face the charges. It wasn’t until August 2010 that Mr Nadir, who now lives in Mayfair, central London, returned and a new court date could be arranged.

Mr Nadir abused his position as chairman and chief executive to steal from PPI claims the prosecution. The former owner of the company denies 13 sample counts alleging he stole money.

Those following the trial are in store for a veritable TV show storyline, encompassing staff who secretly sent instructions for transfers, suspicious colleagues who were told to keep their mouths shut and dodgy record keeping designed to hide the truth.
The case continues and is expected to last four months.

House sales rose slightly in November

At a time when money is tight and unemployment benefit claims are at an all time high, some positive news from the housing sector is well received.

Of course the level of house sales is no where near pre-crisis figures, with less than half the amount of transactions being carried out. Speaking about November’s results, the CML’s director general Paul Smee commented: “A rise in mortgage lending towards the end of 2011 is a welcome indicator for the industry considering confidence has been weak due to fragile economies.”

He added: “We should expect a further increase in first-time buyer activity over the next few months as they push through their purchases to take advantage of the stamp duty concession before it ends in March.”

The temporary exemption from stamp duty initiated by the Labour Government in 2010 will come to an end in just over two months on 24 March. The exemption allows buyers to secure a property for less than £250,000 and avoid the 1% stamp duty.

One of the critics of regulation is Steve Devine. Devine is the chairman of Protect, a trade organization dedicated to looking after the interests of competition and industry standards. Devine urges against regulating the PPI market, arguing that doing so will pose a number of challenges to the protection market.

Devine insisted that people in the industry don’t know how bad the scope of the problem is. He said that the government argues that regulation is directed towards PPI products after the scandals recently faced. However, the regulation could also be directed towards a number of other problems.

Devine warns other industry professionals that the problem may also effect other insurance companies. He is concerned that these other professionals will expect that the PPI regulation isn’t going to have any impact on them. He urges everyone in the protection markets to speak up against any form of PPI regulation, regardless of what their sentiments are towards PPI products themselves.

Devine says that any products associated with personal, accidental and sickness are at risk of being monitored. If he is correct, the PPI regulation could raise costs for consumers on these products as well. A similar trend may be transpiring with European banks, as they start implementing new fees to make up for lost profits.

Devine’s biggest concern is that any bills regulating the industry are likely to be very subjective and open to interpretation. This is going to leave insurers and other industries providing protection services concerned as to whether or not their products will be covered.

The Financial Services Authority has stated that it is reviewing and potentially revising the bill. They will inform everyone in the protection markets which products are and are not covered. Devine feels the current wording of the document is left too ambiguous and open to interpretation.

In order to conduct their investigation, the two offices are asking brokers to cooperate. Many brokers are inclined to do. Steve Devine is the chairman of the Protect Trade Association. Devine is not attempting to discourage brokers from cooperating with investigators. However, he wants to warn them that the investigation may focus on additional concerns that neither the FSA or OFT have disclosed.

If Devine’s speculations are accurate, then it may be in the best interests of brokers to make sure that they don’t get themselves in trouble over another infraction. Devine also mentioned that the proposal drafted in the course of the joint investigation was in reference to PPI as a new product, which may complicate the definition and what the two agencies are looking for. Devine also made it clear to everyone that he was speaking with that the opinions he was sharing were his own, not those of Protect.

Although Devine’s concerns are likely justified, he may also be discouraging brokers from cooperating where their assistance is more necessary. As millions of customers have been defrauded in payment protection insurance mis-sellings, they are depending on many other stakeholders to cooperate with the investigation and get justice.

However, one part of Devine’s advice should be taken into consideration. Devine warns brokers that the draft of the proposal the FSA and OFT are issuing is not consistent with what an investigation into payment protection insurance. Therefore, his assumption that the investigation may be centered around other types of suspected fraud may be true.

As regulators continue to pursue their investigation, many professionals advise that everyone cooperate to the best of their abilities. However, that does not mean they should act against their own interests or cooperate without proper representation. Professionals who are affiliated with Devine and the rest of the members of Protect are likely to encourage brokers to read the proposal carefully and know what information is truly relevant to the investigation.

Believe it or not, that works out to be an equivalent APR of 819,100%. Of course, it is a bit unfair to compare the interest rate of an unauthorised overdraft with that of an agreed loan but it nonetheless illustrates the incredibly high cost of borrowing, despite all time base rate lows. Supporters of such high rates are not just banks but also consumers who have no need for overdrafts, siting the bank’s right to charge for the use of it’s money without permission.

Mike Dailly, from the Govan Law Centre, said: “What we’ve got here is banks with equivalent APRs of nearly one million percent, which is eye-watering.”

The maximum fee for borrowing £100 for 28 days from a UK payday loan company is £42 compared to £100 from a high street bank.

Those who think payday loan providers over-charge customers will be surprised to read that no such registered lender in the UK charged more than 5,000% APR, however Santander and Lloyds TSB charged an equivalent APR of more than 300,000%. Barclays were revealed to be charging an equivalent APR of 366,000% for 28 consecutive days in their ‘personal reserve’.

In a report last month, the Department for Business, Innovation and Skills (BIS) published a report on consumer credit saying that commitments made by High Street banks will “deliver a fairer, more competitive market and mark a real improvement for consumers”.

The cost of mis sold PPI and bank charges was brought into the spotlight back in 2009 when a Supreme Court ruling backed the banks saying charges were fair, but most of them did agree to reduce the level of their fees despite the victory. The problem now, if there is one, is that even though the charges have been reduced, the number of times a customer can be charged in one month has increased.

Interesting side note: The Office of Fair Trading (OFT) said the payday loan industry was worth about £115m in 2004, in 2010 Which? put that figure at £1.9bn. That’s a 17,000% growth in six years.

Customers faith in PPI claims has clearly dwindled. Of course, many customers said they had no idea they were purchasing payment protection insurance in the first place. Although customers are clearly looking hard at new insurance policies and working towards updating and even upgrading, PPI purchases aren’t on nearly as many people’s lists.

Or course, payment protection insurance is still in demand and likely will be for years to come. However, the financial instruments have gotten a pretty bad rap after many financial institutions have resorted to a number of shady practices to sell these packages. Not all PPI packages were built with the intention of deceiving customers, but the legitimate companies have clearly gotten a bad rap.

A number of financial professionals have provided advice to consumers as they crafted their New Years resolutions. They have not instructed customers to avoid using PPI packages, although they have cautioned them about how to proceed with these packages. Professionals advocate that customers take their advice before purchasing any protection insurance package, as they are well aware of the number of scam surrounding many of these claims.

Many professionals are advocating their clients to stack up on their income protection claims instead. Many people have spent money making sure their mortgages and credit card bills would be covered if they got injured or lost their job. However, they could have been much better off just making sure they would still have an income in those situations.

Moving into the new year, you should try to keep these things in mind. Now that the PPI scams have come to your attention, you should see what you can do to make sure that you don’t have to lose money purchasing a bogus financial package that you don’t need. That’s not to say that all PPI packages are bad, but you should be very careful about what you intend to purchase.