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When Making A PPI Claim - Be very careful!

I AM HAPPI, HAPPI CLAIMS - our Head PPI claims Solicitor here, Ronnie Hutcheon has commented that whilst he acknowledges that consumers are claiming back their PPI claims by themselves, he does issue a word of warning to these consumers about the possible under settlements of PPI claims. Mr Ronnie Hutcheon says:-

"I am still in shock at how lenders treat both customers and solicitors when dealing with PPI claims. I get many lenders wanting to contact our clients directly and doing this by passing them onto to their own professional advisers. To be specific, in one case our client was sold payment protection insurance for £15,000. The claim was rejected by the lender and was  passed onto the Ombudsmen and awaiting further court action. Nevertheless, the lender then decided to contact our client and offer them a benevolent gesture. The lender offered our client a mere £1,000 offer to either take it or leave it. My client was very upset and unhappy and contacted me. It shocks me that if this is the way these lenders are treating solicitors it makes me question what they are treating their customers like who aren't legally represented."

It is all very well that the Ombudsman is saying that they should take the PPI claims on themselves, but for many clients and customers who are mis-sold PPI policies, they are not always able to make a claim for numerous different reasons.

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Got Your Money Back - What About The New Loan Agreement?

We have had many verdicts following the claiming back of PPI policies where our client has been asked by the lender to sign a second credit agreement. This second loan agreement must be taken with much caution because you want to ensure that there are no more mistakes or errors which will financially place the customers at a burden especially without legal representation.

Put Up A Fight - Make Your PPI Claim

Mr. Ronnie Hutcheon has of R. James Hutcheon Solicitors reiterates that whether you decide to take your PPI claim on by yourself or through a solicitor, he states the most important thing is that you can do is to make a claim.

Upfront Fees?

A continued further word of warning is that you should never pay an upfront fee if you seek a third party. We never charge our clients an up front fee for any PPI loan which was mis-sold.

Should PPIs Be Banned?

The Competition Commission has strongly suggested a ban on the sale of payment protection insurance when sold with a loan. The ban would aim to prevent the mis-selling of millions of PPI policies throughout the UK. Due to the policy being added upon the whole cost of the loan, the borrowers have to pay the interest which it generates which makes these policies very expensive.

Our head solicitor Mr. Ronnie Hutcheon who also specialises in payment protection insurance has also embraced the prospect of the ban on PPIs. He says:

"A ban on the sale of payment protection insurance with loans will reduce the hostility of interest of the lenders wanting to gain a bigger profit on the behalf of their customers who consequently pays for this product."

While Mr. Hutcheon continues to state that PPI policies are a good product to have but only if they are sold correctly.

Mr. Ronnie Hutcheon also goes on to say,

"Generally my experience has taught me that when large commissions are at stake then the eventual product is usually mis-sold. All you have to do is look at is the endowment and pension blunder. The mis-selling of PPIs has a similar background."

Financial Ombudsman Service

In the year ending March 2010, the Financial Ombudsman Service (FOS) dealt with over 49,000 PPI claims. In total, the FOS resolved 166,321 disputes over the course and covered by the report and consumers were compensated in around 50% of cases. It has recently been reported by the FOS that they have suggested people should not use Claims Management Companies due to false promises of success. It is very important to reiterate that R. James Hutcheon Solicitors are not a CMC. Many of our Clients are pursuing help and guidance to claim back PPI policies that have been mis-sold. In one case we recovered over £26,000 which is a notable amount on any personal loan.

More Time Available For New PPI Claims

The Financial Services Authority has now extended the normal six-month deadline for people to go to the Financial Ombudsman Service (FOS) if a firm rejects their original complaint. This temporary new rule benefits those customers whose complaints were first rejected between 28th November 2009 and 28th April 2010. The FSA stated that the measure was being put in place so that potential complainants were not disadvantaged by a delay in the regulators own plans to revitalise the way firms are required to deal with new PPI complaints.

The mis-selling of PPI policies which is designed to benefit people to help them continue their repayments in case they have fell ill or been made redundant, but it is currently one of the largest source of unresolved problems in the financial services industry.

In September 2009, the FSA decided to get tough, ordering banks and other money lender who sell PPI, to reopen previously dismissed complaints about mis-selling of the PPI, which it now predicts could number around 500,000.

The New Ombudsman - We Need To Deal With PPI Complaints Much Quicker.

Ombudsmen in recent times seem to me like they are getting much younger. Recently a young woman by the name of Natalie Ceeney was appointed the nation's chief financial ombudsmen; this role for 10 years was previously occupied by Walter Merricks. Many suggested that Natalie Ceeney was at a disadvantage because she has never previously worked in the financial services and doesn't have a legal background unlike Walter Merricks. However, she insists that she won't be held at a disadvantage.

Natalie has however held many senior posts within her career which consists of heading up the National Archives, to the director of operations at the British Library. She says that as chief ombudsman, her role is mainly to influence policy and assemble the structure of this organisation.

"It doesn't matter whether you are running a library, a hospital or the Financial Ombudsman Service (FOS). What people who use that service want is excellent service levels and that's something I've always prided myself on improving."

Last week the ombudsman published its annual report and the figures reveal that the volume of cases dealt with continue to rise. It ruled on about 166,000 cases – a 46% increase on the year before. In total, the FOS receives around one million inquiries.

Not surprising, the largest complaint at present is payment protection insurance (PPI), and about three in every 10 complaints are about these insurance policies that are sold alongside loans and credit cards.

Ms. Ceeney states that one of her ultimate tasks is to ensure that the organisation evolves so it can operate more efficiently on this scale. "If you go back 10 years we were set up as a small organisation dealing with 25,000 cases a year. This year we are expecting 200,000 cases. We need to continue modernising, improve our technology and reduce the time it takes to handle some of these cases."

One of the main complaints of the service is that they take far too long to process the cases. Ms Ceeney says that about two-thirds of claims are settled within six months, but admits that this could be improved.

She says new technology could play a big part in the efficiency of the organisation. "We'd like to see systems in place so people could track where their claim is, and how long it is likely to take. If the Royal Mail can do it with parcels, we should be able to do it with complaints."

The FOS is also preparing itself for any major increase in the number of travel insurance complaints, following the recent travel chaos caused by volcanic ash. "We don't know whether this will be an issue yet," said Ms Ceeney.

She also adds that this situation has been further complicated by consumers not knowing where to get refunds either via airlines, travel insurers or credit card companies.

Although Ms Ceeney is guarded about judging individual firms, or even sectors within the financial services, it is evident that some concern about the volume of complaints now being received from claims management companies. About 80% of all PPI claims now come from these claim management companies who will take a large proportion of any payment received, they usually take a percentage as high as 40%.

Ms Ceeney finally states that, "The FOS was set up as an approachable, inexpensive alternative to the courts. People don't need to know legal or financial jargon to lodge a claim, and all will be dealt with impartially. A lot may have changed in 10 years, but that certainly hasn't."

Trading Standards Officer Matthew West told Inside Money that he was shocked at the hard-sell tactics he uncovered when they sent a researcher into eight different braches. He said:

"In almost every single bank and building society we went into, they were automatically including the insurance with the loan before anybody had even mentioned that they were interested or had any need for it."

The Office of Fair Trading has said that PPI offered a "poor deal and often less protection than [consumers] think."

The Financial Services Authority made a statement about the way in which the company Egg went about selling payment protection insurance (PPI) to their customers. They said;

"Egg used inappropriate sales techniques to try to persuade customers to buy payment protection insurance on their credit card even when they asserted they did not want the cover."


Margaret Cole, the director of enforcement at the GFSA, said: "We are determined to see much better practice in PPI. It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time."

Doug Taylor, personal finance campaigner at Which?, said: "We've always known that people were being mis-sold PPI, but we were still amazed to discover the scale of it. It appears that salespeople are chasing their commissions, their bosses are chasing profits. Where's the sense of responsibility to the customer?"