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PPI claims to continue to be refused |
| Posted on 2010-01-25 |
Throughout the past decade, payment protection insurance on mortgages has become a popular way to ensure protection on mortgage payments, however this has become extremely unstable with many companies selling under false pretences. With the economy in its currently dismal state, this type of insurance has never been put to the test quite so intensely.
Policies are unclear and have been sold under false pretences even being sold to individuals who would never have been eligible to make a claim in the first place. Thousands of claims have been refused by providers and this has caused a ripple of outrage. With so many claims being refused, the Financial Services Authority took it upon themselves to conduct an investigation into the situation. Policy providers have been accused of mis-selling the insurance under false terms and conditions and were told to provide accurate information regarding the terms of the insurance.
In addition to this, policy providers are planning on increasing premiums in 2010. When the recession initially took a grip on the economy many insurers hiked up their premiums on PPI to try and protect their own profits, but were ordered to make refunds on these increases by the Financial Services Authority. Unfortunately the order to keep premiums at their original rates only lasted until this year.
It could be seen as an ironic twist that individuals are taking out the protection to cover themselves in the case of redundancies or injuries but are in fact faced with expensive premiums and an extremely difficult claims process with a low claims success rate.
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PPI complaints still causing problems |
| Posted on 2010-01-06 |
Complaints regarding mis-sold Payment Protection Insurance (PPI) policies have reached a record number this year with 45,000 unhappy customers, despite expectations that the number of complaints would in fact drop. The figures show a rise of 45% on the previous year which is a significant rise considering that the situation should be improving.
Feedback is that, insurers are still not handling complaints properly and fairly which has led to a massive amount of pressure on the Financial Ombudsman Service to deal with the complaints and rejected claims themselves.
PPI providers have not dealt with PPI complaints or improved their services in the way that the Ombudsman had hoped and are therefore leaving them with a lot more complaints to deal with than they had initially anticipated.
The financial Ombudsman is overrun with around 800 complaints every single week. The view is that PPI providers and insurers need to take responsibility for the claims and try to resolve the situation properly instead of creating yet more complaints and problematic situations.
>br>Ironically, PPI was created to provide consumers with protection when taking out loans or credit cards in case of job loss or illness where the individual is too ill to work.
Approximately 200 million policies were sold to people who would never have been able to make a claim in the first place, for example part-time workers or the self-employed. The banks have been forced to revise thousands of previously rejected PPI complaints cases. Additionally, there are many cases where consumers were told that they had to take out PPI in order to take out a loan.
During October several banking groups and PPI providers were forced to make payouts. In particular the high street brokers, Swinton, were made to refund almost eight million pounds to customers, as well as receiving a £77,000 fine.
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Draft Proposals for change to 'duty of disclosure' |
| Posted on 2009-12-21 |
The Law Commission have now released their draft proposals to give greater protection to insurance consumers, regarding the duty of disclosure. Unfortunately there are worries that the laws will not have great effects in reducing the unfair advantages that insurers hold over consumers.
The draft bill proposes to enforce restrictions on how insurers could decline certain cases under the duty of disclosure act; the law does not however propose to prevent insurers from further examining a policyholder’s circumstances and grounds of their claim.
The duty of Disclosure gives insurers the opportunity to reject a consumer’s claim on the grounds that they have not fully informed the insurance company of their details. Insurers have all the power and can reject a claim on the weakest grounds. The new bill hopes to bring consumers some much needed protection. It is bad news for consumers that they may find themselves with invalid insurance after consistently paying their premiums.
The conditions of the law, unfortunately still give the insurers power to investigate claims and also policy details after the claim has been made.
Many people cannot see a time when insurers and policy owners will see eye to eye. The gap between the insurer and the consumer needs to be bridged. Insurers should see consumers as a valuable commodity and realise that without them, they have no business. There needs to be fair judgement when it comes to handling claims, instead of insurers looking for the smallest of loopholes to get out of making payments, as this creates a rift between insurers and consumers where there should be a partnership.
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