Payment Protection Insurance Law Leading To Record Complaints

by Hermione - Legal Executive

01 June 2013, filed under Consumer

 Since 2011 the case law on mis sold payment protection insurance has been well settled. Throughout 2010 there was much uncertainty as the banks appealed the courts initial decision requiring them to refund payments made for cover that fell within the grey definition of miss sold. Whilst it is now well settled that the lenders are liable for miss selling what constitutes miss selling of cover is very grey.

Banks or building societies that required individuals to take protection cover or applied undue pressure to encourage them to take out the insurance have to issue a refund. As you can imagine the question over whether undue pressure was applied to the individual is a grey one and this is resulting in many claims initially being rejected by the banks and building society.

The Financial Ombudsman recently reported that they are receiving a whopping 800 complaints daily regarding banks, building societies or other lenders who are not initially agreeing to a refund.

An Interview With A Protection Insurance Expert

We spoke to the protection insurance experts at Provided For who deal in all aspects of protection insurance to see whether they find that the individuals that they deal with are familiar with the law and to ask what is the most popular type of protection insurance. Max from Provided For explained that: "Consumer knowledge regarding payment protection insurance is at an all time high. Most of the people who contact us do so with the intention of taking out a protection policy of one sort or the other. The most popular is definitely the broad income protection insurance plans but payment protection cover is also very popular. We are also frequently contacted by people who believe that their bank may have miss old them cover previously. Unfortunately we are not in a possession to advise on this and so we recommend that such people speak to someone at the Financial Ombudsman".

No doubt the story is similar with most financial advisors who will be recommending that people who believe that they may have been miss old a payment insurance plan go and raise the complaint with the Ombudsman. Nevertheless an average of 800 complaints per day is extremely high and took us a little by surprise and promoted us to investigate a little and write this post.

Payment Protection Represents The Bulk Of All Complaints

Data contained on the Ombudsman's website explains that of all the complaints that they get payment insurance complaints represent 66% of all complaints making it by far the single biggest issue that the UK public is raising with the ombudsman.

It is however apparent that not all of the complaints relate to fresh cases of miss selling. any of them relate to delays in the lenders dealing with a prior claim. The banks filed an appeal against the initial court decision and as a result many claims were put on hold pending the outcome of the appeal. When the banks lost their appeal the court gave them until 31st August 2012 to complete all refunds but many banks have not met this deadline which is giving rise to many of the current complains that the Ombudsman is receiving.

Well a thank you to max at Provided for for contributing to this story and if you would like to consider payment protection insurance then Max's website offers a fast online tool for this. If you are finding that your lender is stalling on making a payment protection refund then we suggest that you too issue a complaint to the Ombudsman but do not be surprised if it takes a number of months for them to get back to you.

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Comments to “Payment Protection Insurance Law Leading To Record Complaints”

21st March 2014 21:38
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9th April 2014 6:24
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