Consequential loss as a result of PPI misselling

[cutter]

Has anybody had experience or has a view whether it is possible to make a claim for consequential loss due to PPI misselling ?

[leclerc]

Re: Consequential loss as a result of PPI misselling

Has anybody had experience or has a view whether it is possible to make a claim for consequential loss due to PPI misselling ?

I think you would have to prove this and it would be a lot harder to do so, ie you can prove that you could not qualify for the cover so that is misselling but how can you argue that the lost of say £20(for arguments sake) a month meant that the consequences was that you lost your home, your credit rating was messed up and that it was all because the banker said the word "all inclusive" or said you were covered for something when you were not. The fact that the loan was approved and that it was affordable means that it would be difficult to argue the case imho.

[teaboy2]

Re: Consequential loss as a result of PPI misselling

But then if that £20 a month caused the OP to suffer financial hardship leading to missing payments on other monthly bills due to be short by £20, then there would be a case of consequencial loss. Same applies if they were told that it protects them due to loss of employment only to find out it did not, as that too would be evidence on consequencial loss, as well as likely leading to financial deteriment, e.g. detrimental recording of data on credit file due to not beable to keep up repayments on the debt as a result of the PPI insurance not covering the payments when employment was lost.

[leclerc]

Re: Consequential loss as a result of PPI misselling

Teaboy, you would have to argue that it is direct cause and effect. If say that the loan was for an amount the OP never earnt then I think the argument is easier to make. However, where they are eligible for the credit and you can prove that the amount was cost effective to them then you would have to ask the question what happened to the OP to stop them paying the loan, ie did they hit a period of hardship caused by an unforeseen factor, ie loss of employment. How does that loss of employment become linked to the PPI sale itself since they are not linked(unless they worked for the bank and missold themselves the PPI!!!). In theory consequential loss on PPI is a good one but in practice it is a very difficult one to argue unless there is an outside the box question of affodability at the point of sale.

[Bill-K]

Re: Consequential loss as a result of PPI misselling

FWIW, I have recently assisted a member here who had a succession of loans from the one lender, each loan consolidating the previous one - and each loan with PPI. Additionally, a clause in EACH loan agreement stipulated that the loan had to be 'serviced' by a current account provided by that lender.

Following financial difficulties, that current account suffered a number of penalty charges. Mathematically, we have been able to show that most of those charges would not have been imposed if the PPI had not been purchased.

Mis-selling of the PPI on ALL of the loans has been admitted - and refunded successfully. A further claim for the 'consequential losses' incurred on the 'servicing' account has been lodged with the FOS, and we are awaiting the outcome. The basis of this is the FSA ruling in the PPI Redress Handbook in Policy Statement PS 10/12:-

DISP APP 3.7.2 Where the firm concludes that the complainant would not have bought the payment protection contract he bought, and the firm is not using the alternative approach to redress (set out in DISP App 3.7.7 E to 3.7.15 E) or other appropriate redress (see DISP App 3.8), the firm should, as far as practicable, put the complainant in the position he would have been if he had not bought any payment protection contract.

The FOS have put it thus:- "put the consumer in the position they would have been in if they had taken out the loan(s) without any mis-sold PPI - and to compensate them if they have been out-of-pocket in the meantime."

Essentially, the FSA/FOS are saying that it is the consumer that must be properly compensated, and not just the account. This principle seems to be reinforced by:

DISP APP 3.2.7 The firm should consider all of its sales of payment protection contracts to the complainant in respect of re-financed loans that were rolled up into the loan covered by the payment protection contract that is the subject of the complaint. The firm should consider the cumulative financial impact on the complainant of any previous breaches or failings in those sales.

BUT - we are still awaiting a FOS ruling/adjudication/whatevva on this, and they aren't exactly hurrying. Unless and until we get a 'positive' result on this from the FOS, then Leclerc's view is what we are up against. And he KNOWS what he's talking about (most of the time...!!!)

[teaboy2]

Re: Consequential loss as a result of PPI misselling

Teaboy, you would have to argue that it is direct cause and effect. If say that the loan was for an amount the OP never earnt then I think the argument is easier to make. However, where they are eligible for the credit and you can prove that the amount was cost effective to them then you would have to ask the question what happened to the OP to stop them paying the loan, ie did they hit a period of hardship caused by an unforeseen factor, ie loss of employment. How does that loss of employment become linked to the PPI sale itself since they are not linked(unless they worked for the bank and missold themselves the PPI!!!). In theory consequential loss on PPI is a good one but in practice it is a very difficult one to argue unless there is an outside the box question of affodability at the point of sale.

Point is, PPI in most cases when it is missold, it is told to the consumer that it will protect them in the event they lost employment. Though as many found out, in a lot of cases when people lost employment they simply were not covered. Whilst they would have to be a direct link, missold is stil misselling, and misselling where you delibrately mislead someone to make a financial gain is stil fraud. So basically no matter how you look at it, the cunsomer has been defrauded, and as a result you simply only need to proof the PPI was missold - Hence why banks are now refunding, because if they don't refund, then theres that risk they may be sued for fraud. Though i agree any consquencial loss as a result of said fraud would need a direct link to that act of fraud in order for the OP to be able to claim compensation.