PPI is offered with financial products such as loans, credit cards, car finance, etc. The purpose of the cover is to provide peace of mind for the consumer, who is told that in the event that they are unable to make repayments on the loan or finance due to sickness, redundancy, or accident the repayments will be covered for a set period of time, giving them time to get back on their feet.

However, concern arose when it was discovered that some lenders or providers were selling PPI to those that did not even qualify for it, and in some cases were either hard-selling this costly cover or were adding it without the knowledge of the consumer. Over the past couple of years authorities have been addressing such issues in relation to PPI, and regulations over the sale of PPI have become far more stringent.

Recent reports indicate, however, that the FOS is still receiving around five hundred complaints a week in relation to PPI, and this has prompted a further probe by the agency. The FOS has now written to the FSA in order to get a more indepth investigation underway, and has expressed concern that many lenders and providers are failing to take problems and issues relating to PPI sales seriously enough.

There are concerns amongst FOS officials that the PPI market, which is said to be worth £5.5 billion a year, is getting out of control, with around two million people thought to have been mis-sold this type of cover over the past five years. Even the Competition Commission has become involved in the issues relating to PPI sales, yet even with three major authorities in the financial world involved in this clampdown the issues and problems continue to arise.

Industry watchdogs have also raised concerns over the fact that some customers have been led to believe that PPI is compulsory, when in fact it is totally optional. Around 1.3 million people are thought to have taken PPI with credit cards under the impression that they had to take out the cover in order to get the credit that they wanted. Past investigations have shown that this is the impression that some lenders have been giving to customers without actually saying as much.

It is thought that if the FSA does decide to investigate further this could result in an industry-wide review and could result in forced changes to the sale of PPI.

FOS still cracking down on loan insurance is a post from: Glitec Loans

PPI is offered with financial products such as loans, credit cards, car finance, etc. The purpose of the cover is to provide peace of mind for the consumer, who is told that in the event that they are unable to make repayments on the loan or finance due to sickness, redundancy, or accident the repayments will be covered for a set period of time, giving them time to get back on their feet.

However, concern arose when it was discovered that some lenders or providers were selling PPI to those that did not even qualify for it, and in some cases were either hard-selling this costly cover or were adding it without the knowledge of the consumer. Over the past couple of years authorities have been addressing such issues in relation to PPI, and regulations over the sale of PPI have become far more stringent.

Recent reports indicate, however, that the FOS is still receiving around five hundred complaints a week in relation to PPI, and this has prompted a further probe by the agency. The FOS has now written to the FSA in order to get a more indepth investigation underway, and has expressed concern that many lenders and providers are failing to take problems and issues relating to PPI sales seriously enough.

There are concerns amongst FOS officials that the PPI market, which is said to be worth £5.5 billion a year, is getting out of control, with around two million people thought to have been mis-sold this type of cover over the past five years. Even the Competition Commission has become involved in the issues relating to PPI sales, yet even with three major authorities in the financial world involved in this clampdown the issues and problems continue to arise.

Industry watchdogs have also raised concerns over the fact that some customers have been led to believe that PPI is compulsory, when in fact it is totally optional. Around 1.3 million people are thought to have taken PPI with credit cards under the impression that they had to take out the cover in order to get the credit that they wanted. Past investigations have shown that this is the impression that some lenders have been giving to customers without actually saying as much.

It is thought that if the FSA does decide to investigate PPI further this could result in an industry-wide review and could result in forced changes to the sale of PPI.

FOS and FSA still cracking down on loan insurance is a post from: Glitec Loans

Lord Hunt said that at the moment many people were wary about using the service, stating that it is often seen ‘like a middle-class service for middle-class people’. One of the recommendations that Lord Hunt has made is to change the name of the Financial Ombudsman Service to something that would be seen as friendlier and more approachable, such as the Financial Complaints Service. He also said that the service needed to focus more on helping those on low incomes to deal with serious debt problems.

Other recommendations included to name and shame companies that performed poorly but to rewards those that performed well. Hunt suggested that all consumer cases should be made open to the public, and a free phone number should be set up between certain hours to increase affordability for those wishing to contact the service. He added that the service should have a fast track service in place for cases that were urgent to consumers, and that a case advisor should be assigned to deal with more vulnerable consumers.

After releasing the report Lord Hunt said: ‘If my conclusions are accepted and my recommendations implemented, I believe the demographic profile of those using the FOS should, must and will broaden, as the organisation thinks not only in terms of its traditional areas of activity – dealing with matters such as mortgages, insurance and pensions products – but also in terms of the problems that typically afflict our less affluent citizens.’

He also stated: ‘Difficulties with debt management are only likely to increase in scale and numbers as the current economic difficulties mount. In many instances the sums of money involved will be on the low side by FOS standards, but the human misery attendant upon them can be devastating. Accessibility is no abstract concept.’

An official from the consumer campaign group Which? commented on the recommendations, stating: ‘It is great news that the review has agreed that FOS should remain free to consumers. Introducing charges would inevitably discourage some people from using the service, particularly those in financial hardship. We also agree that a time-consuming and expensive appeals process would only mimic the courts – it’s very important that the service remains a quick form of consumer redress. FOS is the unsung hero of UK financial services regulation and helps to maintain consumer confidence in the industry.’

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Lord Hunt recommends changes to FOS is a post from: Glitec Loans