History of PPI in Scotland
Type payment protection insurance (PPI) into any search engine and, once you’ve got past all the ‘we can get a huge PPI cheque back with your name on it’ results, you will eventually come across the chequered history behind this financial product.
An article in the Telegraph in 2005 highlighted that customers were being sold payment protection policies on mortgages, credit cards and loans that “may never pay out in the event of a claim”. In fact, this article marked the beginning of the Financial Services Authority investigation into the mis-selling of PPI.
Now replaced by the Financial Conduct Authority, the FSA had PPI flagged to them as a poor value product by consumers, consumer organisations as well as the media. The FSA had decided to look at:
- Aggressive sales practice
- Poor value for money
- Large profit margins
- The selling of unsuitable PPI products to customers
- Complex small print and policy terms
We know now, that when it came to PPI, that all the above were happening!
Likewise, customers were also unable to compare PPI policies they were being ‘offered’ with income protection policies, widely regarded within the financial sector as being a superior product. This was because customers were not being told that the cover provided by PPI fell far short of the term of their loan etc.
Likewise, customers were also not told that PPI did not pay out for longer than 12 months, providing your claim was successful – and the chances of making a successful claim on your PPI policy was thought to be as low at 15%.
The article ends with a case of a customer who on applying for an unsecured loan, was told her application would only be accepted if she took out PPI, adding £140 a month premium to her £500 loan payments. The customer luckily did not fall for this tactic, opting for an alternative loan and arranging her own PPI policy – at half the cost.
After many reviews and arguments, the rights of the consumer have won through and many people are now making successful PPI compensation claims.
If you took out a loan, credit card, store card, mortgage or borrowed in some way from one of the UK banks and lenders, then the likelihood is you also bought PPI too. Offered as an additional product alongside your main loan, you may have been given the impression that it was compulsory.
PPI Claim Scotland is a leading Scottish claims management company, specialising in PPI claims. If you would like our help in claim back your PPI premiums, simply call us or use our online ‘contact us’ form – we are here to help!
Please contact PPI Claim Scotland to make you reclaim payment protection insurance (PPI) owed to you today.