Many banks and lenders use brokers to introduce customers to them and to set up credit agreements for loans, mortgages and credit cards etc. The brokers receive commissions for their services and this quite often lead to the mis-selling of PPI by the brokers due to the commissions that they could earn from selling PPI.
In November 2014, the Supreme Court ruled that Paragon Personal Finance, a secured loans company, had breached the Consumer Credit Act by failing to disclose that the PPI premium paid by a customer included a hefty commission fee to a credit broker that had set up a loan and PPI for a customer.
This means that even if the PPI insurance was otherwise fairly sold, brokers and banks could be liable for mis-selling PPI if it was bought via a broker who had not told the customer that they would be receiving a commission for the sale of the PPI and had not advised the customer how much the commission would be.
It has been the case that PPI has been widely mis-sold, with this mis-selling being carried out by not only the bank or provider, but also by third party brokers.
What types of Finances was Broker Sold PPI sold on?
Types of finances that Broker Sold PPI has been sold on are Personal loans, secured loans, Point of sale loans (for example for furniture or electrical appliances), Flexible loans, Business loans, Hire-purchase agreements (for example when buying a car or caravan), double glazing, and even on home improvement loans.
Which Lenders Were Involved In Broker Sold PPI?
As mentioned above banks and lenders use brokers to introduce customers to them in return for commissions for setting up a loan or other type of finance. The brokers also receive commissions for selling PPI to customers.
There is no exact list of lenders that were involved in Broker sold PPI, and this because most lenders and finance providers may have used brokers to introduce business to them at any given time.
In fact many of the major lenders in the UK have been known to set up new companies under new names in order that they can introduce customers to themselves from these new companies. This can get really confusing if you are not aware of the names of the companies involved.
If you think that you may have taken out any finances previously at any time that you think may have been arranged by a broker and you would like to check the finance for any PPI, then you will either need to recall the name of the broker or the name of the actual lender that you signed the credit agreement with or borrowed you the money.
If you cannot recall the name of the broker that you used to arrange the finance then you would need to remember or find out the name of the actual lender that borrowed you the money or provided you the finance.
Once PPI is confirmed on your Broker sold PPI account you would then need to decide if you think that the PPI has been mis-sold, and if so you must then decide who is responsible for the mis-selling of the PPI, the broker, or the lender.
If you are having trouble remembering the name of the broker that you have previously taken out finances through or you are unsure if you have had or do have Broker sold PPI and are not sure how to proceed then we can assist you to identify your previous lenders and brokers, and if you may have had PPI added to or sold with any of your finances.
Please have a look through our lenders page on this website where we have provided further information on finances that PPI was sold on and which lenders and companies may be responsible for the sale of PPI.
How Is Broker Sold PPI Charged And How Much Does It Cost?
Broker sold PPI is paid for in exactly the same way that any other type of PPI is paid for and this is usually paid for by a regular monthly premium such as on credit cards, store cards, catalogues, overdrafts, mortgages and loans. However on some loans a single premium is added on to the cost of the finance at the start of the loan.
How was Broker Sold PPI mis-sold?
Broker sold PPI has been sold to millions of people but the good news is you can claim compensation if you think you’ve been mis-sold Broker sold PPI.
PPI was routinely mis-sold and added on to finances by the Broker s that sold the PPI by them not being honest or providing the proper or correct information to the customer at the point of sale or addition of the PPI.
In a lot of instances Broker sold PPI was being sold or added on to loans without the seller of the PPI even checking that the PPI was suitable for the customer, that the customer was eligible for the PPI, or whether in fact the customer even required or wanted the PPI.
In addition millions of Single Premium Loan PPI Policies were sold or added on to borrower’s loans when they should have been offered the choice to take out Monthly Premium Loan PPI Policies by brokers and lenders.
The most common reasons that loan PPI may have been mis-sold are:
.You felt under pressure from the broker to take the PPI policy in order for your finance to be approved
.The policy was added to the finance without your knowledge or approval.
.The broker did not explain to you that they would be receiving a commission for the sale of PPI and how much the commission would be.
.Your employment status made you exempt. For example you may have been self-employed or in receipt of full sick pay from your employer in the event of accident or illness.
.You were not explained the terms & conditions and was unaware of the additional cost and possible cancellation fees.
.You had a pre-existing medical condition or were registered disabled at the time the policy started.
.Your age prevented you from qualifying. For example many people were sold a PPI policy when they were already past retirement age or would have been at any stage during the repayment term.
.You had another similar or existing insurance policy. For example life insurance attached to a mortgage.
.Sometimes it was incorrectly stated that this insurance improved their chances of getting the loan or that the insurance was mandatory.
.Due to the high profitability from PPI sales, staff were targeted on sales of PPI & high commission levels were paid, which is believed to have contributed to the mis-selling of these policies.
PPI is an optional extra and should not be included as a requirement of taking out Broker sold finance. Customers also have the right to refuse PPI. In all types of insurance, some claims are accepted and some are rejected. However in the case of PPI the number of rejected claims is high compared to other types of insurance.
For many years consumer support groups and charities such as Citizens Advice (CAB), Which, Martin Lewis of Moneysaving Expert, and The Money Advice Service (set up by the government) campaigned about the problems with Payment Protection Insurance.
In September 2005 the Citizens Advice published a report called Protection Racket that gave evidence on the cost and effectiveness of Payment Protection Insurance. The findings in the report showed that PPI premiums paid by CAB clients represented anything from 13 per cent to a staggering 56 per cent of the amount that had been loaned to the client.
Taking in to consideration the price that is charged for PPI and in addition the high rejection rate of legitimate claims to utilise the PPI policies sold, it is clear to see how the banks and lenders can offer brokers’ commissions and incentives to sell PPI.
Can I Check or Claim For Broker Sold PPI Even If I Do Not Remember Who The Broker Was?
Many people cannot remember the names of the lenders or Brokers that they have previously taken out their finances with such as loans, mortgages, credit cards, and store cards etc.
This is a common problem for people trying to check if they may have had Broker sold PPI or claim for mis-sold Broker sold PPI.
Due to the amount of time that may have passed since the accounts were last open or the different lenders that customers have taken finances out with over the years it can be difficult for them to recall which exact lenders that they have used.
We have successfully helped many clients in these circumstances to identify who the brokers and lenders were that they had taken out their previous finances with or through, then to check if any PPI had been added to their Broker sold finances, and then to claim back for any PPI that had been identified on the finances that the client felt had been mis-sold.
There are many ways to check for any PPI that may have been added on to your finances such as checking credit agreements, your credit report, with the lender, and in your older documents that may be stored away in a loft, garage or filing cabinet.
If you are having trouble remembering the names of the brokers or companies that you have previously taken out finances with or you are unsure if you have had or do have Broker sold PPI and are not sure how to proceed then we can assist you to identify your previous lenders and if you may have had PPI added to or sold with any of your finances.
How Much Is a Broker Sold PPI Claim Worth?
If you do have a Broker sold PPI complaint that is upheld then the PPI lender or provider of the PPI should also correct and pay you back any further losses you have had as a result of PPI such as any arrears charges due to taking the Broker sold PPI.
So in effect a successful Broker sold PPI complaint offer should take in to consideration the initial monthly cost of the monthly PPI Policy or the cost of the Single Premium PPI Policy if applicable, any interest that is charged on top of the PPI monthly payments, and any missed payments or arrears charges that may have been charged and have affected the cost of the PPI.
Once the amount of PPI owed back as part of a PPI refund is worked out and calculated an additional amount of 8% statutory interest should then be added on to the PPI refund due to make the total amount that is to be paid to the customer for mis-sold PPI.
The 8% statutory interest is for financial loss through being ``deprived`` of money that the customer should have had because the business's mistake or bad advice led them to take out an investment or account that wasn't suitable for them.
Undisclosed Commission on Broker Sold PPI Complaints (Plevin)
The Financial Conduct Authority (FCA) have issued new rules and guidance around the high levels of commission earned by financial providers through the sale of PPI. The new FCA rules and guidance on high commissions have been in effect from 29 August 2017.
Typically a high level of PPI commission is considered to be at least 50% of the total PPI premium paid. The main basis of a PPI commissions or Plevin complaint as it is often referred to as , is that the bank or provider earned a high level of commission from the sale of PPI but did not tell you this when you bought it.
Not everyone who complains about PPI will be affected by the Plevin ruling. If you have already had a full refund of your PPI then there is no need to complain about unfair commission, as you would have already had everything back that you paid for PPI as part of your refund.
However If you have already complained about mis-sold PPI but you didn’t get a refund you might be able to complain about unfair commission if any of the following 2 reasons apply to you
1-You took out the credit the PPI was sold with (for example, a loan or credit card) on or after 6 April 2007;
2-You took out the credit the PPI was sold with before 6 April 2007, and it was still running on or after 6 April 2008.
You will need to ensure that any Broker sold PPI commission’s complaints are made before 29th August 2019 as you will not be able to complain after this date. Please also note that although there is now a deadline of 29 August 2019 some people will have an earlier deadline to complain about mis-selling of PPI.
When Is The PPI Deadline?
The Financial Conduct Authority (FCA) who regulates the financial services industry in the UK, including banks and other providers have now set a deadline date of 29 August 2019 to complain about PPI.
This means that anyone who is wishing to make a claim for mis-sold PPI will need to ensure that they have complained to the lender, bank, or PPI provider by 29 August 2019 and the complaint must be received by the firm you’re complaining to on or before 29 August 2019 or run the risk of not having the PPI complaint considered.
The Financial Conduct Authority (FCA) and Broker Sold PPI Complaints
The Financial Conduct Authority (FCA) regulate the financial sector in the UK and they are responsible for ensuring that markets work well, fairly, competitively and they benefit customers. Most banks, credit card companies, mortgage companies, and building societies in the UK are regulated by the FCA.
The FCA was established on 1 April 2013 and took over from the previous regulator of the financial services sector in the UK, which was the Financial Services Authority (FSA). The FSA had been set up by the UK government under the Financial Services and Markets Act 2000, and they were the single regulator for financial services in the UK since December 2001 until the FSA was abolished and replaced by the FCA in April 2013.
If you have a Broker sold PPI complaint against a lender or provider it is important that you understand the FCA do not investigate individual complaints so you will not be able to contact the FCA with a PPI complaint.
If you have a PPI complaint it is best to complain to the company that sold the PPI first and ask them to put things right. All companies that are regulated by the FCA must have a procedure in place for resolving disputes with their customers and respond to you within set deadlines.
All FCA regulated companies are also required to respond in writing to you just to let you know they have received your complaint, they must also respond to your complaint in writing within 8 weeks to provide you with a final response, telling you whether your PPI complaint has been successful or why they need more time to look into it.
If you are not happy with the companies final response, if they reject your complaint, or if you do not hear from them within 8 weeks, then you may be entitled to ask the Financial Ombudsman Service (FOS) to look in to the problem for you and make an unbiased decision.
Remember: You will need to complain about mis-sold Broker sold PPI to the business by 29 August 2019 which is the PPI Claims Deadline. Other time limits might apply, so if you think that you may have a Broker sold PPI complaint, act as soon as possible.
The Financial Ombudsman Service (FOS) and Broker Sold PPI Complaints
The Financial Ombudsman Service (FOS) was established in the UK in 2000 to help settle disputes between consumers and UK based financial services businesses, such as banks, building societies, insurance companies, finance companies, financial advisers and investment firms.
You must first complain to the business that you are not happy with and give them the chance to put things right before the FOS will look in to a Broker sold PPI complaint, as the FOS cannot look in to Broker sold PPI complaints unless you have complained to the business you are not happy with and you are not happy with the companies final response, or if they have rejected your complaint, or if you do not hear from them within 8 weeks of making your PPI complaint.
You will need to contact the FOS about a Broker sold PPI complaint within six months of the business’s final response. If you do not contact the FOS about a Broker sold PPI complaint within six months of the business’s final response then the FOS may not be able to look in to the complaint for you and it will be at the business’s discretion if they allow the FOS to look in to the complaint.
The Financial Services Compensation Scheme (FSCS) and Broker Sold PPI Complaints
The Financial Services Compensation Scheme (FSCS) was established in the UK in 2001 to protect consumers when authorised financial services firms fail. The FSCS cover business conducted by firms authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
They may pay compensation if a firm is unable or likely to be unable to pay claims against it. This is usually because the firm has stopped trading or has been declared in default. It is important to understand that the FSCS will only pay out a maximum of 90% of a Broker sold PPI claim for general insurance advice and arranging and the FSCS can pay compensation only for financial loss.
The FSCS does not cover the Channel Islands or The Isle of Man.
If you are looking to claim back Broker sold PPI from a lender that has now stopped trading or has been declared in default then please do not hesitate to contact us and we will be happy to assist you. We have assisted many clients to claim PPI from the FSCS when their lender has stopped trading or has been declared in default.
Broker Sold Dissolved Company PPI Complaints
If the broker that sold a client PPI is dissolved then you will need to identify and contact the company administrators to make any claim.
Another route to go down in order to bring the PPI complaint is to go directly to the PPI provider and complain against the underwriter of the PPI policy (the insurance company who actually provided the cover), who has a good chance of being a company that was a former member of the General Insurance Standards Council (GISC) and the Mortgage Code Compliance Board (MCCB). You can find out who the underwriter is from the policy document and refer the complaint to it. Then if the customer is unhappy with the outcome, the FOS may be able to assist.
Policies sold Pre January 2005
Specific FSA regulations regarding mediation of insurance did not apply before 2005. However, the FSA’s Principles for Business did, and most providers were signed up to the General Insurance Standard Council (GISC) Code.
This, and the Association of British Insurers (ABI) Code, which predated the GISC, means that the provider can be held to account for mis-selling PPI.
However, whilst this applies to most banks, building societies and credit card providers, it doesn’t apply to providers of consumer credit.
This means that intermediaries like Norton Finance, loans.co.uk and Central Trust, consumer finance companies (e.g. Blackhorse and Welcome Finance) and car dealers are not covered by these regulations prior to 2005. The Financial Ombudsman Service (FOS) also does not have jurisdiction to adjudicate these claims. So a PPI claim in this area would be tricky.
Where sale pre-dates 2005 and the provider was not covered by regulation or membership of a standards code, it is possible to complain to the underwriter of the PPI.
Any company that sold PPI to customers before 14 January 2005, and it was not a member of GISC or the MCCB cannot be referred to the FOS for the FOS to consider a complaint against it.
If the above is not possible for any reason then the case may be referred to the Financial Compensation Services Scheme (FSCS), a body created by the government to assist customers to make claims against financial firms that are no longer trading. It is important to note that in these circumstances the client would need evidence of the PPI and the mis-sel and would have to be fully cooperating to bring the claim.
Pre 14 January 2005 PPI Sales By Non GISC Or MCCB Members
On 14 January 2005, payment protection insurance (PPI) complaints against former members of the General Insurance Standards Council (GISC) and the Mortgage Code Compliance Board (MCCB) came under the remit of the Financial Ombudsmen Service.
Any company that sold PPI to customers before 14 January 2005, and it was not a member of GISC or the MCCB cannot be referred to the FOS for the FOS to consider a complaint against it. In such cases it is suggested that the customer or representative may be able to complain against the underwriter of the PPI policy (the insurance company who actually provided the cover), although this will depend on a number of factors.
You can find out who the underwriter is from the policy document and refer the complaint to it. Then if the customer is unhappy with the outcome, the FOS may be able to assist.
If you are looking to claim back or check for PPI from a broker or lender that you have previously taken out finances with and you are unsure of how to proceed do not hesitate to contact us to discuss the matter as we will be happy to assist.
Due to the PPI deadline of 29 August 2019 we are no longer taking on any new PPI Clients. We will continue to carry out work for the clients that we are already working on behalf of so that we can provide the best service possible to them.