To date some £16bn has been paid out in compensation for missold payment protection insurance. Now the FCA has asked firms to review 2.5 million complaints to see if any more is due. Hard on the heels of this news Neil Woodford sold his funds’ HSBC holdings, citing the regulator’s capricious attitude to fines.
Against this backdrop, claim chasers continue to fabricate claims. I have had dozens of offers to get me a refund on the PPI supposedly ‘sold’ to me with a HBOS loan I took out in 2005. The only problem is whilst I certainly took out the loan I did not ask for or get PPI with it. Over the years, I have had umpteen different credit cards and a few loans but nobody has ever sold me PPI. Sure, I have been offered it. It was invariably included in the repayment figures when I searched for a deal but I simply unchecked the box before applying. Likewise, when obtaining new cards or loans by phone the operative at the other end usually asked if I wanted PPI, but the attempt at selling it was of the pre-scripted tick-box variety designed to keep the person delivering it out of trouble when their internal sales management Gestapo listened in on their calls.
On the one hand this does not mean the banks never missold PPI. Certainly they did in many cases, that much is obvious. I have had clients coming to me for help with genuine claims rather than pay away the typical 30 per cent or so that claim chasers demand. We have done the letters for free where they were established clients and for a pittance where they were not. All have been successful. Equally though I have been approached by more than a few would-be claimants where the sale was perfectly valid and they were blatantly trying it on. I have point blank refused to get involved with such claims. Afterwards though, more than one has called to say that their claim had been paid after the claims management company told them what to say on the form.
Misselling is undeniably wrong but the fraud and deception being practiced day-in and day-out by claims management companies and their clients is a crime. I wonder how many of those who blithely put their names to forms full of untruths think of themselves as criminals. If they do, they probably rationalise it as a victimless crime. It is nothing of the sort. Where a small firm is the target the cost comes straight out of the owner’s income. Where banks are concerned it is the savers, pension fund members and shareholders who pay.
One day somebody in Government might wake up and realise that PPI is in reality a double-scandal. The first half of the story was the actual misselling. The second though has been the obtaining of payouts by those who did not deserve it. Obtaining a pecuniary advantage by deception, as the law used to call it. Does it matter? Neil Woodford obviously thinks so and as is usually the case, he is right.
Neil Liversidge is managing director of West Riding Personal Financial Solutions