This is Money PPI artical 3/8/09

[bach]

Banks wriggling out of paying PPI claims

 

Paul Sims, Daily Mail

3 August 2009

Reader comments (4) | Guide

 

Families are being forced to the brink of ruin as banks and finance firms refuse to pay out on redundancy insurance policies. Sold policies like Smarties: Banks have been accused of systematic mis-selling of PPI.

Competition watchdog pushes for PPI ban

 

Avoid the rip-off by finding a stand-alone policy. They can be 85% cheaper than from lenders.

 

 

 

Up to one in six applications are being dismissed because of 'weasel exclusions' in the small print or because the payment protection policies were originally mis-sold, senior industry figures say.

 

Before the recession, the banks and finance firms received up to £ 6bn a year selling the policies, which are supposed to provide cover for repayments on mortgages, loans and credit cards.

But as unemployment soars past 2.3m, some are being accused of 'dishonouring' the policies. As a result many customers have been left fighting to save their homes.

Vince Cable, the Liberal Democrat Treasury spokesman, said: 'This is outrageous and unforgivable behaviour. The same banks that profited from selling the insurance products are now potentially making these families homeless by dishonouring the policies.'

The Financial Services Authority has already taken action against 19 firms for mis-selling payment protection insurance. Alliance & Leicester was fined £7m last year.

One victim is David Sugden, 45, from Plymouth, who took out a policy with Black Horse, part of Lloyds, in case he lost his job because of a heart condition. In 2006 he was sold a new policy, replacing the old one, for £175 a month.

But when he lost his job on the grounds of ill-health he was told that his heart disease was not, in fact, covered by the new policy and that he should have continued with his previous one.

'It wasn't worth the paper it was written on,' said Mr Sugden, who faces having his home repossessed if a court challenge to the bank fails.

Ronnie Hutcheon, of Cheshire-based solicitors R James Hutcheon, is representing Mr Sugden. He said: 'The banks and finance firms sold these policies like Smarties. Many people are now finding out they were overcharged for policies that were not fit for purpose.'

Payment protection schemes are among the most profitable policies ever devised in the financial industry.

Out of £100 paid out in premiums, as little as £15 is returned in payouts. At the height of the lending boom, banks, brokers and lenders sold more than five million policies a year.

Margaret Goodman, a 30-year-old mother of two from Cannock, Staffordshire, lost her job in telephone sales in January.

She and her husband took out a joint £50,000 loan in January 2007 from broker Central Capital, which was secured on the family home.

Mrs Goodman agreed to pay £12,724 plus interest for a payment protection policy. But when she was made redundant she was told it only covered her husband. 'We're now having to sell our home,' she said. Record numbers of complaints about the policies are being submitted to the Financial Ombudsman Service.

 

 

In 2008-9 they out numbered complaints about bank charges by more than ten to one. Nearly 90% of the complaints are upheld.

The British Bankers' Association said yesterday that banks had responded to concerns about payment protection insurance policies and were now providing more detailed advice to customers. It denied there had been systematic mis-selling.

Lloyds Banking Group said it had rejected Mr Sugden's claim because of a pre-existing medical condition, but had offered to refund his premiums. Capital Claims said it was disputing Mrs Goodman's claim that it had not treated her fairly or sold a suitable policy. It said it was made clear that the policy did not cover both her and her husband for redundancy.

[alanalana]

Good post and make sure you keep it bumped up so folks get to see it.

[bach]

Hi Alanalana, thanks for yr comments, appreciated.

 

I just retired, so plenty of time to find all sorts of interesting articals, and of cause I don't have to deal with the my on going dreaded A & L Case

(2006 - 2010 ) untill next April.

( 5 Times in Court, but still keep fighting on, thanks to CAG)

 

Is there any chance this could be placed as a sticky save me keep bumping it.

 

Thanks Lynn

[yourbank]

I said this elsewhere when the article came up on the forum there and I will say it here. I am surprised it's ONLY 1 in 6.

[alanalana]

Hi Alanalana, thanks for yr comments, appreciated.

 

I just retired, so plenty of time to find all sorts of interesting articals, and of cause I don't have to deal with the my on going dreaded A & L Case

(2006 - 2010 ) untill next April.

( 5 Times in Court, but still keep fighting on, thanks to CAG)

 

Is there any chance this could be placed as a sticky save me keep bumping it.

 

Thanks Lynn

 

If you can give me just a link to the article I will make sure it goes into the stickies

 

aa

[angry cat]

If you can give me just a link to the article I will make sure it goes into the stickies

 

aa

 

Banks wriggling out of paying payment protection insurance (PPI) claims | This is Money

 

AC

[alanalana]

In the big stickies link with credits to bach and ac

 

aa