• The Citizens Advice Bureau (CAB) estimates there are over 20 Million PPI policies in existence, with over 7 Million being sold each year.
• The CAB has identified widespread mis-selling of PPI policies, including many consumers that had PPI premiums added to their loan without being told by the salesperson.
• The CAB found that only 4% of PPI policyholders actually make a claim under their policy.
• 1 in 4 of all claims made under PPI Policies are rejected by the insurer, due to exclusions and limits in small print of the policy.
• Most policy premiums add 20%-56% to the cost of the loan, plus interest.
• The Office of Fair Trading estimate that a PPI policy to cover a £10,000 loan costs around £2500, of which a staggering £1500 is paid in commission to the lender.
• According to a recent report in The Sunday Times, an insurance industry insider estimated that as many as 70% of PPI policies have been mis-sold.
• It is estimated that PPI is worth £6bn in revenue to UK banks and Loan Companies
• The Financial Services Authority (FSA) has fined the following companies for mis-selling PPI policies:
• The HSBC-owned lender HFC Bank has been fined a record £1,090,000 by the Financial Services Authority for failing to treat customers fairly when selling Payment Protection Insurance. HFC sells a third of its policies in shops such as PC World and Curry’s alongside “Buy Now-Pay Later” deals.
• Hadenglen Home Finance Plc: Fined £182,000 in September 2007 for inadequate systems and controls when recommending re-mortgages and PPI. PPI failings took place between January 2005 and November 2006.
• Capital One: Fined £175,000 in February 2007 for failing to ensure that 50,000 customers buying credit cards and loans between January 2005 and April 2006 received important information about the policy.
• GE Capital Bank Ltd: (supplies cards for Asda, Comet, Debenhams and Topshop among others): Fined £610,000 in January 2007 for inappropriate sales of its store cards and credit cards.
• Redcats: Fined £270,000 in December 2006 for also not having adequate systems and controls in place to minimise the risk of unsuitable sales.
• Regency Mortgage Corporation: Fined £56,000 in December 2006 for not collecting sufficient information during a PPI sale to ensure its recommendations met customers’ demands and needs.
• Loans.co.uk: Fined £455,000 in October 2006 for not having appropriate systems and controls to minimise the risk of unsuitable sales.