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From the FSA
PPI changes challenged: Can you still complain?
If you have insurance to cover your loan or debt repayments in the event of accident, sickness, reduced income or loss of employment, you can still complain about how the policy was sold to you or the response you received after making a claim. Find out how.
If you have taken out a loan, mortgage or credit card, you may have been sold payment protection insurance (PPI) to cover the repayments if you are unable to meet them in certain circumstances.
These policies can also be called loan protection, credit protection, or accident, sickness and unemployment insurance.
It may have been suggested to you that you needed PPI to be approved for a loan or credit, or even had a policy added to the amount of your loan without your knowledge, increasing the balance you have to repay.
Consumer protection challenged
We took over the regulation of insurance sales in 2005, and since then have found evidence of widespread problems with the sale of PPI and how complaints are handled.
To ensure customers are treated more fairly when complaining about the sale of a PPI policy or after making a claim, we announced a package of measures for firms to follow by 1 December 2010.
These measures include:
What’s happened now
The banking industry, through trade association the British Bankers' Association (BBA), started legal proceedings on 8 October 2010 to challenge our ability to insist on these measures.
We intend to contest this challenge as we consider the measures to be a fair solution for consumers and the industry.
What to do if you have a complaint
Despite the challenge by the BBA, you still have the right to complain about your PPI policy.
If you have a complaint about the circumstances of the sale of your PPI policy or the suitability of the product for you, you should first complain to the firm that sold it to you.
If your complaint is about a claim you have made, you should raise the matter with the insurance firm.
You are more likely to get a prompt response if you follow the firm’s complaints procedure – you can check online or call to confirm how they prefer you to proceed.
The firm then has eight weeks to look into your complaint and provide a response.
If you are not happy with how the firm has dealt with your complaint you can take it to the Financial Ombudsman Service as soon as possible and within six months of receiving a response. The ombudsman service is a free, independent service for settling disputes between financial services firms and their customers.
The ombudsman service has a template to register a complaint about PPI which you can send to the firm that sold you the policy.
Find out more about what to do if you have a dispute or complaint.
Fairness failings
We have taken action against 24 firms for failings in PPI sales since 2005, with fines totalling nearly £13m. We also stopped the sale of single premium PPI with unsecured personal loans so consumers won’t pay upfront for several years of protection.
The quality of complaints handling is another area of PPI we have focused on.
In the past five years there have been over a million complaints made about PPI. Firms on average reject around half the PPI complaints they receive, but some reject nearly all the complaints, according to figures we received from 18 major sellers of PPI.
Nearly one-third of rejected complainants go to the ombudsman service, where more than 80% are overturned in the consumer’s favour.
Read more and Discuss at: Banks challenge new PPI rules - Legal Beagles Consumer Forum
If you have insurance to cover your loan or debt repayments in the event of accident, sickness, reduced income or loss of employment, you can still complain about how the policy was sold to you or the response you received after making a claim. Find out how.
If you have taken out a loan, mortgage or credit card, you may have been sold payment protection insurance (PPI) to cover the repayments if you are unable to meet them in certain circumstances.
These policies can also be called loan protection, credit protection, or accident, sickness and unemployment insurance.
It may have been suggested to you that you needed PPI to be approved for a loan or credit, or even had a policy added to the amount of your loan without your knowledge, increasing the balance you have to repay.
Consumer protection challenged
We took over the regulation of insurance sales in 2005, and since then have found evidence of widespread problems with the sale of PPI and how complaints are handled.
To ensure customers are treated more fairly when complaining about the sale of a PPI policy or after making a claim, we announced a package of measures for firms to follow by 1 December 2010.
These measures include:
- ensuring firms handle complaints properly and offer redress where appropriate;
- explaining when and why firms should review past complaints to identify if there are serious flaws in sales practices that may have affected customers who bought PPI; and
- setting out common sales failings to help firms identify bad practice.
What’s happened now
The banking industry, through trade association the British Bankers' Association (BBA), started legal proceedings on 8 October 2010 to challenge our ability to insist on these measures.
We intend to contest this challenge as we consider the measures to be a fair solution for consumers and the industry.
What to do if you have a complaint
Despite the challenge by the BBA, you still have the right to complain about your PPI policy.
If you have a complaint about the circumstances of the sale of your PPI policy or the suitability of the product for you, you should first complain to the firm that sold it to you.
If your complaint is about a claim you have made, you should raise the matter with the insurance firm.
You are more likely to get a prompt response if you follow the firm’s complaints procedure – you can check online or call to confirm how they prefer you to proceed.
The firm then has eight weeks to look into your complaint and provide a response.
If you are not happy with how the firm has dealt with your complaint you can take it to the Financial Ombudsman Service as soon as possible and within six months of receiving a response. The ombudsman service is a free, independent service for settling disputes between financial services firms and their customers.
The ombudsman service has a template to register a complaint about PPI which you can send to the firm that sold you the policy.
Find out more about what to do if you have a dispute or complaint.
Fairness failings
We have taken action against 24 firms for failings in PPI sales since 2005, with fines totalling nearly £13m. We also stopped the sale of single premium PPI with unsecured personal loans so consumers won’t pay upfront for several years of protection.
The quality of complaints handling is another area of PPI we have focused on.
In the past five years there have been over a million complaints made about PPI. Firms on average reject around half the PPI complaints they receive, but some reject nearly all the complaints, according to figures we received from 18 major sellers of PPI.
Nearly one-third of rejected complainants go to the ombudsman service, where more than 80% are overturned in the consumer’s favour.
Read more and Discuss at: Banks challenge new PPI rules - Legal Beagles Consumer Forum
