PPI scandal

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blythburgh
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PPI scandal

Post by blythburgh » Sat Jul 07, 2018 12:13 pm

OK so it does not affect us as we did not take out a mortgage or loan with PPI.

But was listening to MoneyBox on Radio 4 this morning and was shocked to hear that the usual commision was 50 to 75% of what those who took out PPI paid.

The couple who had gone to court paid £10,000 for the insurance but only £2,500 of that was for the actual insurance policy.

No wonder the banks etc were so keen for the public to sign up to PPI
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler

pabenny
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Re: PPI scandal

Post by pabenny » Sat Jul 07, 2018 1:57 pm

Same with extended warranties (which are, in fact insurance) and mobile phone cover. Add-on insurances such as legal expenses or key cover for your motor insurance have even higher margins.
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Boro Boy
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Re: PPI scandal

Post by Boro Boy » Sat Jul 07, 2018 2:30 pm

One part of the scandal was the sale of PPI to the self employed who would never have a chance of claiming on the plan... :problem:
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Constantine
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Re: PPI scandal

Post by Constantine » Sat Jul 07, 2018 5:38 pm

Boro Boy wrote:One part of the scandal was the sale of PPI to the self employed who would never have a chance of claiming on the plan... :problem:
Depended on the policy. Many PPI policies did cover the self-employed, particularly Mortgage PPI. Which was, generally speaking, not mis-sold in any case.
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Constantine
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Re: PPI scandal

Post by Constantine » Sat Jul 07, 2018 5:40 pm

pabenny wrote:Same with extended warranties (which are, in fact insurance) and mobile phone cover. Add-on insurances such as legal expenses or key cover for your motor insurance have even higher margins.
As a general rule, never buy add-on insurance products.

Which is why I have always declined all those kind offers of PPI or extended warranties. :)
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Constantine
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Re: PPI scandal

Post by Constantine » Sat Jul 07, 2018 5:51 pm

blythburgh wrote:OK so it does not affect us as we did not take out a mortgage or loan with PPI.

But was listening to MoneyBox on Radio 4 this morning and was shocked to hear that the usual commision was 50 to 75% of what those who took out PPI paid.

The couple who had gone to court paid £10,000 for the insurance but only £2,500 of that was for the actual insurance policy.

No wonder the banks etc were so keen for the public to sign up to PPI
The case involved Paragon Personal Finance. I don't know whether they are a bank. But I wouldn't assume that what they did was necessarily typical. I think Paragon is a bit sub-prime. :)
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RonFlorabud
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Re: PPI scandal

Post by RonFlorabud » Sat Jul 07, 2018 7:58 pm

Where would this place be without Blyth?
RY you need to provide extra shares.
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blythburgh
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Re: PPI scandal

Post by blythburgh » Sun Jul 08, 2018 8:50 am

RonFlorabud wrote:Where would this place be without Blyth?
RY you need to provide extra shares.
No thanks, I prefer to earn them from clicking and shopping
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blythburgh
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Re: PPI scandal

Post by blythburgh » Sun Jul 08, 2018 9:04 am

Constantine wrote:
blythburgh wrote:OK so it does not affect us as we did not take out a mortgage or loan with PPI.

But was listening to MoneyBox on Radio 4 this morning and was shocked to hear that the usual commision was 50 to 75% of what those who took out PPI paid.

The couple who had gone to court paid £10,000 for the insurance but only £2,500 of that was for the actual insurance policy.

No wonder the banks etc were so keen for the public to sign up to PPI
The case involved Paragon Personal Finance. I don't know whether they are a bank. But I wouldn't assume that what they did was necessarily typical. I think Paragon is a bit sub-prime. :)
An odd story in that the couple were not missold PPI but the local court decided they should get back all the money they paid plus interest. But this could be overturned by a higher court of course.

But what shocked me was that 50 to 75% of the money paid by anyone who bought PPI was the norm.

And we never have bought rip off insurance for electrical goods etc.

Was shocked when a friend who was on sickness benefit at the time bought a Sony music centre at Currys but changed it for an Alba one when he was offered product insurance. He wrongly felt he could not have afforded to replace it if it went wrong. But these things are most likely to go wrong in the first year when you have a guarantee or last for years. That shocked me so much it is burned into my memory.

Just like when 'im indoors neice and then partner, now husband, took out the mortgage on their first house. I told my sister in law that papers like the FT and The Daily Telegraph were warning people not to buy endownment mortgages. So the young couple enquired about a standard repayment one instead. They were told by (iJohn or whatever his name was) there was for and against both types of mortgage and sold them two endowments to cover the mortgage. Have they claimed money back because they were mis-sold? No idea as I have not brought up the subject since. Nor did I say anything when told they had bought not one but two endowments. Niether of them have been unemployed since taking out the mortgage and though I cannot remember the year they must either be close to paying off the mortgage or have already paid it off.

But a nice fat bonus to the man who sold them the policies and an even fatter amount to the company he worked for.
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler

Constantine
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Re: PPI scandal

Post by Constantine » Sun Jul 08, 2018 2:19 pm

blythburgh wrote:
An odd story in that the couple were not missold PPI but the local court decided they should get back all the money they paid plus interest. But this could be overturned by a higher court of course.
In November 2014, the Supreme Court ruled in Plevin v Paragon Personal Finance Ltd (Plevin) that a failure to disclose to a client a large commission payment on a single premium PPI policy made the relationship between a lender and the borrower unfair under section 140A of the Consumer Credit Act 1974.

https://www.fca.org.uk/news/statements/ ... inance-ltd

As a result, the FCA has required lenders to carry out a review and issue refunds of commission paid in excess of 50%. what is different about this new case, is that a court decided that the plaintiffs should get all the commission back.
blythburgh wrote: But what shocked me was that 50 to 75% of the money paid by anyone who bought PPI was the norm.
I don't believe it was the 'norm'.
blythburgh wrote:....

But a nice fat bonus to the man who sold them the policies and an even fatter amount to the company he worked for.
Impossible to say without further detail. I once had two endowments supporting my mortgage on a house purchased in 1987. They both generated a small surplus.

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