Yet another scandal involving financial institutions and insurance companies milking vulnerable consumers of their hard-earned money, while providing nothing in return, is becoming known; and this one may have been going on for years, if not decades. MPs in the United Kingdom are uncovering a practice by these institutions of mis selling payment protection insurance (PPI) on a scale that has seen billions of pounds needlessly paid out.
PPI is insurance designed to cover loan repayments when borrowers die, are made redundant, fall sick or fall bankrupt. The regulation of PPI is of utmost concern to MPs working on the Credit Contracts and Financial Services Law Reform Bill overhaul of lending laws. However, the MPs have been told by the Commerce Commission that the proposed regulation is not tough enough. Little transparency is involved in the sale of PPI to borrowers when they apply for a loan.
PPI is often sold to people on guaranteed incomes who have no need for it and exorbitant premiums that make it more likely a borrower will default are just some of the claims submitted by consumer advocates and budget advisory services to the Commission. After regulators investigated its actions, the Lloyds banking group set aside billions to offset litigation expenses.
"When clients are questioned about their knowledge of these insurances, most do not understand what they are, who the insurer is, how they can claim, what they are covered for or what they are not,” financial literacy coordinator at the Mangere Budgeting Services Trust, Lezanne Gibbs, told MPs in her submission on the bill. "Every single contract collected from various lenders have the ancillary charges of various insurances. More often than not these insurances are missold.”
“There are many instances where they would never be in a position to claim, such as PPI sold to beneficiaries or pensioners. Everyone questioned had the distinct impression these added fees and charges were compulsory,” Gibbs added. “Lenders are not telling their clients fees like insurances and extra warranties are optional, or finding out if they already have cover, such as life or contents insurance," she concluded.
About Dial4PPI.co.uk
Dial 4 PPI (http://www.dial4ppi.co.uk) employs solicitors that take on some of the biggest financial institutions who have mis sold payment protection on your behalf. We aim to ensure your payment protection insurance claim is successful and you can claim back the money you deserve.
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