The Mis-selling of PPI – Has Anything Really Changed?
You can be forgiven for holding a negative attitude toward banks and the banking industry as a whole. After all, no industry should allow, let along encourage the whole sale mis-selling of a product.
Driven by profit and commission, and not the well-being of the customer, the mis-selling of payment protection insurance (PPI) has come back to bite the banking industry hard.
No bank, lender and financial institution in the UK is immune or exempt from the PPI scandal. Some are in deeper than others but all, at some point, were responsible for mis-selling an insurance product to their customers.
And so, with the possibility of a 2018 PPI deadline looming, you may be wondering could something like this happen again? Has anything changed?
Changes at the top – the Financial Conduct Authority (FCA)
As well as the way in which the product was sold to customers, a change that was sorely needed was how the banking industry was regulated. More importantly, how wrong doing was detected, challenged and changed.
A contributing factor to the mis-selling of PPI going on for so long was that no one really had the power to do anything. The Financial Services Authority could only look on but, this has now changed. The FCA has teeth – and are not frightened to snap and bite when needed.
Single premium policies are no longer sold to customers or businesses
- Opt in, not out – online applications, mainly for credit cards but also for some other products, had a small opt in box that was already ticked as part of the application process. It was at the end of a very long form, meaning the majority of people did not notice it was there.
Customers must opt in to any scheme or additional products, not opt out
- Advised sales – many customers were advised to buy PPI but were not how it met their needs or why it was better than another product. As a result, people bought a policy that did not cover them.
All advised sales, in future, must be clearly explained to the customer and customers must also receive a clearly written letter, outlining why the product is right for them
- Timing – many customers were sold PPI at a time when they were in an increased emotional state. In other words, they were buying credit to buy something important. On being given the impression that buying PPI would help their application succeed, many people bought into products that were not suitable.
Do you have a PPI claim? Find out today – call Payment Protection Scotland.