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Archive for tag: Mis-selling of PPI

What Changes Did the Mis-selling of PPI Bring?

Payment protection insurance (PPI) was mis sold to thousands of customers. Compensation is now rolling freely to most customers after a long and drawn out legal battle. However, some customers still face an uphill struggle to get their money back.


With a PPI deadline of August 2019 on the horizon, many are asking the question 'could it happen again?'. What have we learnt from the PPI debacle?

Advised Sales

At one time, customers were advised by the bank's representative to buy a PPI policy. But there was a problem with this -  the advice the customer received was not written down.

If any bank, lender or building society recommends or advises a product to you alongside the main loan or other product, they must tell you why and do so clearly.

What's changed?

If you are sold any product, including PPI, then you must be given a written statement, outlining the reasons why the policy is the right one for you.

Payout rates

Another issue with PPI that many customers were unaware of was the low number of successful claims made against PPI policies.

Car insurance, for example, has a payout rate of over 80% - in other words, 8 out of 10 claims made on car insurance policies are successful.

PPI had a payout rate of just 15%. Making a claim also took a long time and was a complicated process.

What's changed?

Banks and building societies, if they still offer PPI for sale, must publish their payout rates on an annual basis. This information must also be given to customers in order to make an informed decision.

Giving a choice

Many banks and lenders gave the impression to customers that the purchase of PPI alongside their loan or other product was compulsory, and that their own brand of PPI was the only one available for purchase.

Just like any other insurance, you have the right to shop around and get a better deal. Many customers, if they had been encouraged to do this would have found a much better deal on a better product.

What's changed?

Customers are to be informed that they can shop around for PPI insurance. Income protection insurances are considered better value than PPI.

Bombarding customers

Borrowing money is an emotive purchase. In other words to re-mortgage, your property means making the changes to your family home it needs.

PPI, along with many other products were sold to customers at the same time, with many believing that they stood a better chance of gaining the money they needed by buying these products.

What's changed?

Customers are not to be bombarded at the time they buy the loan or mortgage etc. with any additional products being offered to customers at least seven days later, NOT at the time.

Could it happen again? No, says the Financial Conduct Authority.

The Financial Conduct Authority replaced the Financial Services Authority some years ago. The FCA has the teeth it needs to force banks and lenders to comply - and they are clear that any customer due compensation should get it.

Call Payment Protection Scotland now to get your claim started!