When you receive advice to purchase a financial product, the company selling it has a duty to ensure that the product in question is suitable. In order to establish this, they need to carry out an assessment of your financial circumstances, which should involve:
- Asking about your employment situation
- Asking about existing policies you hold
- Asking about your medical situation
- Assessing how long you would need the cover for
- Assessing whether you can afford the policy
Were you Mis-Sold PPI?
If you were sold payment protection insurance (PPI), can you honestly say that the salesperson addressed all of these areas? If the sale was completed without one or more of these areas being covered, you may have a case for mis-selling.
The company also has a duty to ensure that any decision you make to purchase is a 'fully informed' decision. In the case of PPI, you should have been given information regarding:
- The fact that the insurance was optional
- The type of premium, i.e. single or monthly premium
- If it was a single premium, that you would pay interest on the premium amount, together with details of the refunds due on early cancellation
- The total cost of the insurance
- The key exclusions of the policy, with particular regard to any that might be particularly relevant to you given your employment or medical situation
If you were sold PPI without fully understanding one or more of the above, you may also have been the victim of a mis-sale.
Other Forms of Mis-Selling
Mis-selling could also have occurred if you were put under undue pressure to buy. Are you aware as to whether the company who sold you PPI claimed to be acting on an advised or non-advised basis? If they claimed not to be giving advice, they should not have used any form of persuasion at all, and should have given you a balanced explanation of both the positive and negative features of the product before you made your decision. If they were giving advice, they still owed you a duty of care to fully explain the product and not to put you under undue pressure.
In addition to the above, the most startling way in which you may have been mis-sold PPI is if it was added to your loan without your knowledge or consent. If you are unsure whether you had this insurance, check the fine print of your credit agreement or your bank statements, or contact the lender.
An estimated 35 million PPI policies have been sold in the UK, and it is likely that a significant majority were mis-sold. However, only around five million complaints have been made to date. The Financial Ombudsman Service found in favour of the customer in 89% of the PPI complaints it handled in the 12 months to March 31 2010. This figure reduced to 66% in the period to March 31 2011 but was back up to 82% for the following 12 months. Given that some PPI complaints are upheld by the provider the percentage of mis-sales may be even higher than these figures.
Next steps to seeing if you have been Mis-sold PPI...
Several million people have already received their compensation for proving they were mis-sold PPI, so why not see if you were mis-sold PPI and are due some money as well?
All information presented in this article is accurate as of January 2013