Banks Caught Out
have lost today’s High Court ruling into the judicial review of payment protection insurance (PPI). My view is that this is good news for consumers. Many people have got this sort of rip-off insurance (sorry I cannot think of a better term) without even knowing it.
Many people (largely the self-employed) often cannot claim on the cover which is expensive for what you get. All the cover does is to ensure that the lender gets their monthly payment if you cannot work for 2 years – with lots of stings attached. The cost of the cover is very high when compared to the benefit and the better alternative of Income Protection
(or Permanent Health Insurance – PHI), sometimes people have PHI provided by their employer so there is no need for additional cover anyway. Some lenders have misled people into believing that the loan/credit is only available if they take out the PPI. In addition, the cost of the PPI has often been added to the debt and incurred additional interest, thereby inflating the cost of the debt or loan. This is plainly unethical. I am at a loss to understand why it took the FSA quite so long to deal with this issue properly. I am sorry to say that this is yet another example of commission based selling leading to the detriment of the consumer and the further tarnishing of the entire financial services industry.
Whilst I do not advocate or promote a culture of complaint, clearly when something is wrong it should be put right and the Banks have failed in this regard. Redress is estimated to be around £3bn which is a huge sum of money and of course one that Banks are unenthusiastic about parting with. Regrettably, we all know that all of us will probably ending up with a share of the bill, by way of increased bank charges.
can be found at Martin Lewis’ Moneysaving Expert website, (which needs a better design)he has championed this cause for some time and has further details about how to claim, although assuming that today’s ruling stands (which will probably be appealed), Banks will need to contact anyone that they have sold one of these policies to… so give it 6 months and watch out for the bland letter that will possibly be deliberatley mailed during the 2011 Christmas postal period.
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