The Great PPI Clean Up

They say sunlight is the best disinfectant, and if it is true, there is no better than for the clear light of day shone on the Payment Protection Insurance industry.

Greater customer awareness, television advertising and the increasing number of PPI complaints have almost forced firms, credit institutions and banks to stop mis-selling and clean up their act.

For example, there has been widespread stalling of the sale of PPI integrated loans, lenders have been drained and huge institutions have stopped selling policies altoghether, it has also been spoken of sales staff having to get financial qualifications to be able to sell further products or services. Exposure to shady practices have also affected other insurance products, such as serious illness cover, which has seen the refund reclaims be increased from 8 in 10 to 9 in 10.

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PPI Claims Can Go Back Pre-regulation

The new policy on PPI of the Financial Services Authority (FSA) has been barely a week and is already receiving heavy criticism from the industry.

The last comment is a financial services partner at Beachcroft LLP, Dan Preddy, who had a particular problem with the application of rules for sales made before mediation PPI regulated by the FSA general insurance. Mr Preddy said: "There will be a deep disappointment at the retrospective rules for sales made before the general insurance intermediary, regulated by the FSA."

Overall, the changes are intended to prevent more harm from mis-sold PPI and paying back the PPI insurance will cost the industry between £ 2 billion to 4 billion pounds. The FSA acknowledges that if done correctly there will be victims of 5-10% and provides that some general insurance intermediaries will fail because of the refunds.

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Injury and Accident Compensation Claims

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Financial Services Authority confirms measures to reform PPI

Hundreds of thousands of individuals who have been mis-sold payment protection insurance could be offered compensation if companies follow new rules laid out by the Financial Services Authority on Tuesday.

More than 21,400 complaints have been lodged over controversial payment protection insurance since April, according to the Financial Ombudsman Service (FOS), which has received a total of 114,478 complaints over PPI in the last five years.

The latest figures come as the Financial Services Authority (FSA) confirmed reforms to protect consumers in what has become one of the UK’s biggest mis-selling scandals of recent years.

The FSA said the measures - which come into force on December 1 - were designed to “mend a market that has been broken for too long”. It said the measures are designed to ensure customers are treated more fairly when complaining about PPI and should help them to receive better information when buying the product.

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Banks face £4 Billion pound bill for PPI Mis-selling.

Banks may be forced to pay back £4bn in mis-sold insurance scam Banks and insurance companies may have to pay a staggering £4bn to customers who were taken in by a 'loan protection racket', it has emerged.

City watchdogs have published their first estimates on the scale of repayments due to people sold payment protection insurance (PPI) alongside personal loans, mortgages, credit and store cards.

Vast numbers of the expensive policies were sold to customers without proper checks on whether the policies were suitable.

The PPI was sold to consumers on the basis it would provide a safety net to cover loan repayments in the case of sudden unemployment or sickness.

However, commission-hungry salesmen sold PPI to people who would never be able to make a claim, including pensioners, those in seasonal work and people with long-standing medical conditions.

The Financial Services Authority (FSA) said paying refunds and compensation to customers who have not yet complained could generate a bill of £1bn-£3bn. It suggests there will be another £700m to £1.2bn over five years for customers who have already complained.

The FSA estimates that insurance brokers may have to pay up to £430m with the rest paid for by a varying range of PPI providers, led by banks and insurance companies.

The watchdog estimates that average redress for people who bought single premium policies is £1,925. It is a lower £990 on average for people who bought the policies via monthly premiums.

The FSA has previously fined a number of household name banks and insurance groups for mis-selling PPI.

First published in the Daily Mail