Results published recently on Sky News reveal that 30 million people have been subjected to nuisance calls promoting claims for mis-sold PPI. This equates to a shocking 67% of Britain receiving unsolicited phone calls, texts, emails or letters. This exorbitantly high number has resulted in Citizens Advice calling for a ban to financial service firms using these marketing techniques for the payment protection insurance scandal.
The PPI Scandal
PPI is a form of insurance that allows consumers to insure their repayment of a loan. The need for this varies from the customer becoming ill, being made redundant or any other circumstance that would hinder them from earning the money to repay their debt. While sound in theory, PPI was mis-sold to customers who had not carefully reviewed the terms and conditions surrounding their specific payment protection. Furthermore, it is estimated that 40% of policy holders were completely unaware that they had even agreed to purchase payment protection in the first place. PPI policies were commonly sold in conjunction with mortgages, loans and credit cards from the 1990s. The mis-selling of PPI insurance peaked when banks realised that payment protection insurance was more lucrative than car or even house insurance. At its peak the Financial Services Authority (FSA) estimated that approximately 3 million people were owned PPI refunds which equates to a massive £4.5 billion payout.
In the wake of the PPI mis-selling scandal, financial services firms latched onto a customer’s right to claim refunds, offering to complete this process on their behalf. The mis-selling scandal was replaced with a PPI claims feeding frenzy with approximately 55% of the British public estimating they have been contacted at least ten times in the past year. Citizens Advice research into this harassment revealed that 98% of these people felt that this contact was unsolicited and against their permission.
The PPI scandal backlash is two fold: firstly, customers were mis-sold the insurance. Then, to add insult to injury, often the services being offered by financial claims companies over the phone are never actually delivered. Therefore customers suffer twice: first from the banks and the mis-selling of the PPI and then not receiving full compensation thanks to incompetent financial services handling.
Public protection: ban nuisance calls
The CEO of Citizens Advice, Gillian Guy has called for a crackdown on PPI claims cold calling. She believes that cold calls aren’t just annoying, they also signify that the claims service isn’t actually good as they are forced to harass customers on such a broad scale. A blanket ban of telemarketing would allow customers to determine good from poor service providers. Whether Guy gets her wish or not, it is advisable for the public to become vigilant about the calls they accept. This can be done through a number of methods: going ex-directory, registering with the TPS or utilising a call blocking service such as those offered by http://www.callblocker.co.uk/.
In response to the Citizens Advice call for action over the banning of cold calling PPI claims, telecoms regulator Ofcom has announced that it will investigate these nuisance calls from May.
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