Payment Protection Insurance or PPI was sold by banks and other credit providers from the early 1980’s, albeit it sales were only regulated from December 1989. It was an insurance product that enabled consumers to protect their repayments in the event of being off work ill, or losing their job.
The insurance covered a whole raft of borrowing types and typically these included mortgages, loans, credit cards, store cards, catalogue accounts, car loans, overdrafts and even secured loans. The insurance was either sold as a “lump sum,” added to borrowing from the outset, such as personal loans or secured loans, or via a monthly payment, with, for example a credit card, store card, mortgage or catalogue account.
With practically ever type of insurance, the common theme is that it’s underwritten at the time cover is put in place. This would apply to say life insurance or home insurance, where customers have to be very careful not to fall foul of material non-disclosures that could invalidate the cover.
PPI or ASU (Accident, Sickness and Unemployment Cover) however, was generally only underwritten at the time a claim was made. Coupled with that, the selling of the product required little or no training as it was viewed as a “packaged product.” No additional qualification or particular skill was required. It was an easy sell with the very minimum of staff training costs, if at all and a generous commission from the provider to the seller.
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Normally the prelude to taking cover was no more than 4-6 key questions . Typically these might be some or all of the following –
1. You are not in a temporary or agency position.
2. You work more than 16 hours per week.
3. You haven’t consulted a doctor within the last 6/12 months.
4. You don’t have any pre-existing medical conditions.
5. You live and work in the U.K./You are a UK taxpayer
6. You are over age 18 and below age 65 at time of taking the cover.
PPI or ASU, could be considered a “scattergun approach to insurance protection,” a kind of “one size fits all approach.” To explain more, every single customer paid exactly the same price for their cover, be it sold on a “lump sum,” or monthly basis. To put that into perspective, an 18 year old female, non-smoking office worker in perfect health wold pay precisely the same as a 64 year old male labourer smoking 60 a day and maybe not enjoying the absolute best of health. What could possibly go wrong?
And wrong it did go! This type of insurance was seen as an easy “hit” for lenders. Low cost of delivery, minimal if any staff training and huge profit margins. Virtually every client was sold the same product, despite the fact it might have been far from best advice. It was “one size fits all.” This type of insurance always carried a “deferred period,” which was in essence a period of time before you could submit a claim. In more recent times this was generally a month after being made redundant or suffering ill-health, but at the outset of ASU and PPI, some providers sold policies where the initial waiting period was as much as 60 or 90 days. As much of a delay as to make these policies virtually useless.
With the commissions on offer becoming truly stellar, the sale of these insurance policies became a significant percentage of banks’ profits with advisors and sales staff being given stiffer and stiffer targets and the mis-selling became rife. We now know that in many cases the percentage profit for the lender was truly eye watering, with figures of up to 100% being common place. By 2008, 20 million PPI policies existed in the U.K.
Finally in May 2009, the FSA banned the sale of single premium PPI. This was following years of campaigning by the CAB and the OFT, but not before a number of leading banks were levied huge financial penalties by the FSA, in what is now acknowledged as the biggest financial mis-selling scandal to hit the British public.
By early 2018, the compensation bill had hit more than £32 billion. Industry experts have reason to believe that this still represents less than half of what is genuinely due to consumers.
Regulation on products of this nature has been in place since December 1989 with firstly the ABI and subsequently the GISC voluntary codes, until formal regulation through the FSA followed in January 2005
The Beat the Banks team have a wealth of practical banking and financial services experience. We experienced at first hand the sales driven culture that saw traditional and honest banking replaced by target driven selling no matter the customer need.
From Our Clients
“Huge thank you to the team. After attempting to claim PPI myself and getting absolutely nowhere, I got Beat the Banks involved and ended up getting £12,000. What a result. Beat the Banks made it so easy and were committed right to the end.”Shona, Dundee
“From previous experience of PPI claim companies, I was a bit dubious if anyone could help me but I thought I would try Beat The Banks. To say I am pleased with the service and conclusion to my claim is an understatement. Beat the banks and my claim handler in particular handled all aspects of the claim from Clydesdale Bank with professionalism, courtesy, and efficiency to secure a positive result on my behalf. I would certainly recommend the services of Beat the Banks to anyone who thinks they have PPI claim, especially with the Clydesdale Bank.”Mr A McQuillian
“Down entirely to Mike’s hard work, we previously had a successful claim with Clydesdale Bank. Mike was convinced we had more loans with PPI and he was relentless in efforts to recover our paperwork from the bank. Finally, after many attempts, enough records were recovered to submit several claims. We have now received much more compensation, covering loans going back many, many years. If it had not been for Mike and the team at Beat the Banks this would never, ever have happened. Literally, all we did was sign our name and bank the cheque.”T & A, Dundee
“I was apprehensive about using a company to claim my PPI as I had previously responded to a “cold call” and was pestered with calls. I heard about Beat The Banks on a local radio station and because they were based in Scotland I felt comfortable approaching them. I have had a very positive experience with Beat The Banks. They are not pushy and answer any queries timeously. All the Agents I have spoken to were knowledgeable, polite and friendly. After the initial information gathering conversation, they understood my needs and just got on with my claim. No hassle. Even when it was clear that my claim was of a relatively low value they processed without delay. I would definitely recommend using Beat The Banks …. they put all the other companies out there to shame.”Mrs S, Falkirk
“Excellent service so helpful, I received a substantial sum back that I had no idea I was due, thank you again to Beat The Banks especially to Gary who was so helpful and efficient in every way.”Mrs M, Elgin
“We had no paperwork but £52,500 reasons to say thank you, we are now living our Spanish dream! Exceptional service.”Dave & Linda , Dundee
“Have just found out I have won all my cases with the bank, going back many years and been awarded compensation of just over £15,000!”Mr S, Dingwall
“We really appreciate the doggedness and professionalism of Jenna and the team at Beat the Banks. This is something we’d never have gotten round to doing and we’re so glad we went through the process with professionals as we’ve now had great results. Only positives have come from the experience.”Mr & Mrs M, Shetland
“From beginning to end, Beat the Banks have been very efficient. I am very pleased with the service from Jenna and the team. I am highly delighted and I have been recommending all of my friends.”Mrs C, Glasgow