There has been a lot of publicity in recent years about the bad behaviour of banks and other financial institutions. In no case has the criticism been more justified than in relation to the mis-selling of PPI. PPI is now much discredited but it was sold alongside a range of loans and other financial products to cover payments if you fall victim to an accident, sickness or unemployment and cannot work. The complaints in short have been that the full cost was never explained or that consumers were advised that it was mandatory when it was not or that the product sold was wholly inappropriate. The banks have pretty much waved the white flag so what should you do?
- In my view it is always a good idea to write on your own to the bank and insurance company concerned simply to register your complaint. It is perfectly possible that they will respond proactively and positively.
- If you follow the complaints procedure of the company concerned the process may take a few weeks but they are devoted much resource to this and have made large provisions for compensation payments.
- If this route fails my strong recommendation is that you take your complaint to the Financial Ombudsman Service as soon as possible thereafter. The service is a free and independent service for settling disputes between financial institutions and their customers and PPI complaints are becoming a well-trodden path. See www.financial-ombudsman.co.uk. The website is clear and very helpful and gives you a template to register a complaint about PPI which you can send to the firm that sold you the policy.
- Following this path should be enough. The Financial Services Authority has taken action against more than 20 firms over PPI issues and has imposed fines in excess of £13m. They have stopped the sale of a single premium PPI with unsecured personal loans so that consumers will not pay for years of protection. They have also clamped down heavily on complaints procedures to the point at which most consumers regard PPI now as nothing less than toxic and to be avoided. Be wary however because the insurers have not yet given up – PPI is coming back in new guises with different names so always tread carefully when entering into an insurance contract of any kind that relates to payment protection