To curtail the need for PPI claims, the Competition Commission have already come out and confirmed the proposed ban on the sale of Payment Protection Insurance (PPI) alongside credit agreements. This was recently backed up by a rejected appeal from Barclays who wanted to be able to sell PPI in it’s current format.

The latest organisation to support the ban is the consumer watchdog, Which? It believes companies should not sell PPI in the same place as they offer credit. Like many, Which? thinks the consumer will benefit from being given the opportunity to look elsewhere for PPI cover, and the market will become more competitive as more providers see more business.

PPI is evolving, the mis sold cash cow that it once was is no longer and it has just about been replaced by the product it should always have been. Instrumental in this cleaning up of the industry is the involvement of the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS).

Over the last 3 years the FSA have fined a number of financial outfits for sales of mis sold PPI including well-known brands such as Alliance & Leicester, Egg and HSBC owned HFC Bank. While the FSA has been handing out fines, the FOS has been handing out compensation to victims of the mis-selling scandal, compensation that the FSA reckon could reach £4bn when all said and done.

It’s Monday and your busy, narky or both (you may be neither but stick with me on this) so I’ve got a quick and easy one for you this morning, 5 facts about PPI claims and the Financial Ombudman Service (FOS):

1. Last financial year the Financial Ombudsman Service handled a record breaking 925,095 complaints, that’s over 2,500 complaints each day!

2. The FOS awarded compensation to claimants in half of all the cases it looked at.

3. Three out of every 10 new cases related to PPI, 58% higher than the previous year; mis sold PPI claims made up 95% of all PPI related enquiries.

4. Claims management companies referred 28% of the total number of PPI related complaints to the Ombudsman.

5. And finally… When the FOS was set up in 2000, it’s goal was to resolve 25,000 disputes a year, last year it did 166,321 and this year it’s expecting to settle around 200,000 disputes. Not bad at all.

There’s your 5 facts and if you want to get in touch with the Ombudsman, you can call 08000 234 567 or visit www.financial-ombudsman.org.uk.

Get this: in the last financial year, April to April, just under 135 people a day made a PPI claim to the Financial Ombudsman Service (FOS). That may surprise you but what may really make you take a step back is the fact that this figure is still rising.

The FOS is in charge of handling disputes between consumers and financial institutions and it had it’s hands full last financial year with over 166,000 disputes on file, 46% more than the year before. In total, one third of these cases were about PPI and two-thirds of those were brought to the FOS by claims management companies.

A bit of PPI news for you here, the British Insurance Brokers’ Association (BIBA) introduced a new members scheme for payment protection insurance (PPI) recently. Today the BIBA has announced it’s appointment of Millennium Insurance as the exclusive provider of the new insurance scheme.

Millennium is the distribution arm of Direct Group and will offer BIBA members a stand alone PPI product that may be sold with or without a credit agreement. Read more here…

The Flip Side Of The PPI Ban

The mis-selling of PPI has been one hell of a scandal that has left the banks and mortgage lenders with billions in profit and the consumer with useless policies. The ban we’ve blogged about over the last few days will do it’s best to encourage people to reclaim PPI payments and ensure this never happens again, especially the sale of lump sum policies.

But is there is a danger that banning the sale of PPI policies alongside a mortgage or personal loan could result in many borrowers having a debt with no protection at all? If the Competition Commission are to be trusted then the greater competition and lower prices created by the ban will nullify any disadvantages associated with not selling the policies alongside the credit agreement. The reality is yet to be seen.

On Saturday we blogged about the Competition Commission’s planned ban on the sale of payment protection insurance (PPI) alongside credit agreements. Originally proposed in January 2009 after an Office of Fair Trading investigation, the ban has now taken a strong step towards becoming a real regulation after the overturning of an appeal by Barclays.

Once made official, the ban will require lenders to leave a seven-day gap between the agreement of credit and the discussion of any PPI policy. The aim is to remove the threat of mis sold PPI and give consumers the option to search the market for the best cover for their requirements. However, PPI could still be sold at the point of sale to customers who specifically request it. We now wait until July to find out whether the ban will be put in place.

Remember the proposed ban on the sale of PPI alongside loans, credit cards and mortgages to help prevent mis sold PPI from occuring again? Well it’s soon to become a reality as the Competition Commission has pressed ahead with the steps required to install this new piece of financial regulation.

Until recently, the ban had been held up for over 12 months as the result of a legal challenge by Barclays. But after a thorough investigation into the pros and cons of the proposed regultion the commission concluded that, with the exceptoin of retail PPI, the new rules would go ahead. from the regulation. Making up just 2 per cent of the PPI market; retail PPI payments were deemed too small to justify spending time looking for a deal elsewhere.

As is always the way with these things, the commission must now invite comments from the industry before making a final ruling in July.

With potentially thousands of people across the UK still facing the threat of unemployment, the news of even more spending cuts is not welcomed by those in the Public Sector. Those occupying such jobs as nurses, policemen, teachers and the like are those most at threat as the incoming government seeks to reduce the deficit.

Of course, you could get yourself some PPI or MPPI to cover the cost of your mortgage and outgoings and with so much economic uncertainty, the right policy at the right price could provide peace of mind that your outgoings will be covered. We’ll still be fighting mis sold PPI but as long as your employer hasn’t yet made any announcement on job cuts, it may be worth switching providers or getting some cover.

Complaining, us brits love to do it and usually we don’t have much of a reason, but there is one area of life in the UK that has been well worth complaining about  – mis sold PPI and the banking system. Quite a few people have been making their feelings known to their banks, lenders and the Financial Ombudsman and the last figures from the FOS showed 31,000 complaints purely about PPI.

Those figures were for 2008/2009 and no doubt the numbers are much higher now and if the latest Financial Services Authority (FSA) stats are to be believed, banks are faced with a deluge of customer complaints after the backlog of bank charges claims have been released to be handled.