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Tag Archive: ppi fraud


PPI Claims Firms Getting Rich Off of Scandal

Filed Under: mis-sold ppi by Kalen — Leave a comment
February 20, 2012

The Financial Services Compensation Scheme stated that the PPI claims firms are set to make a lot of money off of their clients. So far this year, these firms are set to bring in a total of £12 million.

Over 16,000 claims have been filed against PPI firms this past year. That represents a 33% increase from 2010. The claims firms have been busy handling all of these complaints, which are supposed to be paid out over 2012 and 2013.

The Financial Services Compensation Scheme is concerned that many of these firms may be exploiting customers. According to research conducted by the FSCS earlier this year, the likelihood of a customer filing a successful PPI claim on their own is as high as it would be if they were filing the claim on their own.

Claims companies take about 25% of the average payout for a successful PPI claim. Although the value they bring to customers has been questioned, three quarters of all customers still wok with them anyways. The FSCS feels people do not understand how straightforward the process can be to do it by themselves.

Mark Neale, the man who leads the FSCS, said that the number of PPI claims that are expected to be filed over the course of the next year is only expected to grow. This means that the profit that the claims companies are expected to bring in is expected to be extremely high. Neale said that customers should be aware that the success rate they would have for filing the claims with the FSCS themselves would likely be just as high.

Both the Financial Ombudsman Service and the FSCS are dealing with a record number of complaints. Many customers are forced to wait a significant amount of time to hear a decision on their case or receive payment after a decision has been made. Many unscrupulous claims firms have taken advantage of this by promising customers they would be able to get them their money more quickly than they would be able to on their own.

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Claims of PPI Fraud More than Double

Filed Under: ppi claims by Kalen — Leave a comment
January 23, 2012

The number of allegations of PPI fraud have increased substantially over the past few months. Between October and December of 2011, the number of PPI claims increased by more than 50%. Within those three months, the number of customers claiming they were mis-sold PPI reached a staggering 30,301.

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.

 

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Industry Leaders Argue PPI Regulation Threatens Protection Industry

Filed Under: PPI by Kalen — Leave a comment
January 16, 2012

After the public continues to be irate over the PPI scandal, many politicians, citizens and advocacy groups are calling for regulation. Although the prospect of regulation sounds welcoming to many people, others see potential problems.

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.

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Statements from Claims Management Firms to be Wary Of

Filed Under: Latest PPI News by Kalen — Leave a comment
January 1, 2012

Many customers have  received a number of cold calls from claims management firms. However, these firms have made a number of erroneous claims that you shouldn’t take at face value. Here are a few of the claims that you need to be aware of:

  1. They only know some of your details. Most notably, many unscrupulous claims management firms don’t usually look heavily into the details of the applicants they are speaking with. Many claims management firms tell their prospective customers right away that they are eligible for a claim. However, all many of these firms know is that the customer purchased a plan. The customer may have sold the mortgage or other financial plan the PPI plan was attached to. In actuality, the claims management firms may not even know if the plan was ever purchased at all. Anytime the firm fails to do its due diligence, you should be wary. They are likely either incompetent or dishonest.
  2. They make false promises. Another problem with many PPI claims management firms is that they make false promises to their targets. For example, they may say that they can guarantee a claim. They may also tell you that they will be able to expedite your claim and get you your money back faster. There is no way they can make this promise. No claims management firm has any control over the procedures of the turnaround times of a PPI repayment.
Using a PPI claims management firm can be a good idea. However, you should make sure you understand what you are looking for. You need to have a clear understanding of the firm you are going to be working with. You should be wary of any firm that cold calls you.
Always make sure that you can research the firm carefully. Get the name of the company and ask for a track record of the company. At the very least, you want to make sure you can identify who you are talking to. Cold callers often aren’t who they claim to be.
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Ministry of Justice Going After PPI Claims Fraud

Filed Under: ppi claims by Kalen — Leave a comment
January 1, 2012

Apparently there is no shortage of institutions willing to take advantage of customers who have been mis-sold PPI claims. As customers struggle to get their money back from the big banks,they are flocking to PPI claims management firms. These firms are setup to help customers get their money back. Or so it would seem.

Unfortunately, many confidence men are trying to take advantage of the desperate customers trying to get their money back after being mis-sold PPI claims. According to undercover journalists, there is plenty of evidence to suggest that illicit companies offering fake PPI management services are scamming customers out of billions of dollars.

The Ministry of Justice is cracking down on these companies and trying to shut them all down. However, they also advocate that customers use common sense when being solicited for these services.

One of the biggest problems with PPI mis-sellings is that customers are unable to identify these predators. According to reporters who went undercover as customers looking to receive PPI refunds in their efforts to expose the massive PPI racket, these firms have made a number of different claims to mislead them.

One of the scam artists told the undercover reporter that he already knew all the details of her personal life. Obviously, he would have hung up if he even sensed he was speaking to a reporter. Another caller even went so far as to tell the reporter that the only way they could get a refund was by using his services.

The Ministry of Justice issued a statement that they have a team of investigators looking at all companies involved in these scams. As the regulatory body that oversees claims management firms, the Ministry will ban all firms that are caught lying to customers.

Meanwhile, customers are warned to be wary of anyone making such claims. They should hang up on cold callers and be aware of the claims process. Understanding the claims process will help them identify any misleading statements these firms may be making. For example, some firms have promised that they can speed up the claims process. This is a complete fabrication and something that customers shouldn’t work with any firm that makes it.

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Warning Issued to Financial Providers of New PPI Policies

Filed Under: mis-sold ppi by Kalen — Leave a comment
December 1, 2011

The Financial Services Authority and Office of Fair Trade have issued warnings to financial services firms intending to offer new PPI policies. These two institutions will use all powers at their disposal to punish any firm that sell PPI packages that may hurt customers. The FSA and OFT are already working hard to penalize all financial institutions that have cost their customers money and deceived them about their policies.

The majority of PPI claims have been sold by banks. These banks have tried selling their packages to customers who took out credit cards, mortgages or private loans. Many customers have been mis-sold PPI packages and the High Court has issued a ruling that will force them to pay restitution to approximately half a million customers. The banks and other PPI sellers will be forced to repay their customers at least $6 billion pounds.

Financial regulators are now concerned that some financial institutions are creating bogus PPI packages. They may be trying to sell these packages with a number of loopholes that will keep them from having to pay any benefits to their customers.

This new stance is particularly significant for the FSA. According to the agency’s managing director, the FSA has never issued guidance on a particular financial product up until now. She said that the FSA and the OFT will work closely together to keep a tab on what financial firms are doing. They are going to keep an eye on any packages they are coming up with and what impact they will have on customers.

The financial authorities are finally ready to take a real stand on all the missellings of PPI products. Up until now, they have been fairly lax on the issues. The problem with PPI funds coincides with some issues with both policies towards mortgage endowments and personal pensions.

The FSA is set to be restructured. According to the head of the FSA, it is vital that they are able to deter financial shenanigans before they arise. So far, they have been focused on fighting these cases after the fact, which has proven to be notoriously ineffective. Hopefully, the new measures will help customers avoid having to take a loss from these packages. The chances of customers being exploited is far greater when they are dealing with financial services companies than they are with other companies.

The OFT is just as dedicated. They are going to continue regulating companies that engage in inappropriate selling practices.

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