Pre Contract Guide - Payment Protection Insurance

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1 Pre Contract Guide - Payment Protection Insurance It is important to us that you make the right decision. We therefore provide guidance about what we do, how we work and our fee. PPI Advice Ltd does not provide regulated financial advice. Our services are dedicated to mis-selling complaints and gaining financial redress for clients. We undertake complaints that involve financial services products. This guidance is specific to payment protection insurance (PPI). It was reported on the BBC News website (18/01/13) that sales of PPI may become the largest compensation bill to be paid by any section of the UK's financial services industry Payment protection insurance is designed to protect borrowers. It was sold alongside personal loans, credit cards, finance agreements, business loans and mortgages. Deciding whether a policy was missold will depend on many factors. Borrowers have various options and they are noted below. Do Nothing Some people will be unaware that PPI was attached to their finances. There are borrowers who can make a valid complaint but may not do so as they are unaware of the situation. Others may decide it is not worth looking into, or they do not have time or lack sufficient information to pursue a complaint. Complain Yourself There are plenty of organisations offering free advice about how to make a PPI complaint. An internet search offers many bodies to choose from. These websites make suggestions about how to complain. This invariably includes a template letter that you can amend to fit your circumstances. These websites inform readers they should complain to the policy seller in the first instance and allow eight weeks to receive a Final Response letter. If you are dissatisfied with the Final Response you can refer the complaint to the Financial Ombudsman Service (FOS). Please note you must make a complaint to the FOS within six months of the policy seller s Final Response, otherwise your matter may be time-barred. Appoint PPI Advice Ltd We are a Claims Management Company (CMC) and we work on behalf of individuals who may have a complaint in respect of a financial services product. Our aim is to remedy this situation. This entails seeking redress by way of a compensation payment equal to the financial loss suffered. Complaints may date back several years, and as a result interest may be payable. To Commence A Claim To proceed clients complete a Letter of Authority and our Terms and Conditions. These two forms are instructions for us to act on a client s behalf and enable policy sellers to release details to us in order to facilitate a complaint. We seek to establish if current and previous lenders sold PPI alongside a client s finances. Clients provide us with the lenders details, such as the name, type of credit and account number. If the finance was arranged several years ago these details may be difficult to locate. We work with the information available, so do not be daunted if you cannot locate old paperwork. We recognise you may be unaware if PPI was added without your knowledge or consent. It is our responsibility to check on your behalf.

2 Clients can find PPI has been added to their finances by checking paperwork issued at the time they borrowed the money. However, PPI policies have also been sold separately and added to borrowings after they commenced. Credit card statements normally itemise premiums in respect of PPI. But you may no longer have statements for credit cards not in use. We accept and understand the reasons why historical information is not easily accessible. On receipt of the application forms we send a cooling-off notice. This letter advises clients they can change their mind about using our services. It advises there is fourteen days to do so. It is designed to ensure clients did not experience any pressure to complete our forms and appoint us to deal with their claim. An example cooling-off notice is available on request. To cancel our services a client can return the notice by post or send an . Alternatively, a client can telephone us or by a visit in person. A copy of the completed Terms and Conditions are enclosed with the cooling-off notice for clients own records. We permit clients to cancel our agreement after the cooling-off notice period and no fee will apply. However, once an offer of compensation is made that is in accordance with FCA and FOS guidelines we reserve the right to charge our agreed fee. The Claims Process A. We write to lenders to establish if PPI was added to any borrowings. We advise clients accordingly. B. If PPI was added to the lending, we can seek point-of-sale documentation from the policy seller. This is treated as a Data Subject Access Request. We pay a fee per individual borrower. The standard fee for a single borrower is 10 and for joint borrowers it is 20. C. We establish the circumstances surrounding how the policy was promoted and sold. In order to facilitate this, we send our own questionnaire to clients. D. If we receive point-of-sale documentation from the lender we examine it. We also consider the answers our client has provided on our questionnaire. We take into account all the relevant facts and compile a comprehensive formal complaint and send this to the firm who sold the policy. E. The firm should acknowledge the complaint within five working days. The majority of firms send their own questionnaire to our clients. If this happens we ask clients to sign the questionnaire and post it to us. We add details we have already received from our client and return the firm s questionnaire. F. Firm s should send a standard holding letter after four weeks confirming they are investigating the complaint. We diarise and chase if necessary. G. The firm should issue a Final Response within eight weeks, or advise why there is a delay and when a Final Response will be issued. We diarise and chase if necessary. H. If the Final Response upholds the complaint, we check whether the compensation has been calculated correctly. If we find the calculations to be incorrect we challenge the firm and advise our client accordingly. If the compensation is correct we advise our client to accept the offer by signing the acceptance form and returning it to us. I. The firm issues a cheque or pays the compensation directly into our client s personal bank account. We may receive a letter from the firm advising that compensation has been paid, and the complaint is now closed. J. We issue an invoice and seek settlement, but only after the compensation monies become cleared funds. K. If the Final Response defends the sale of the policy, we examine the firm s findings. If necessary, we request the firm to deal with complaint points they have failed to address and other aspects we consider to have been dealt with in an unsatisfactory manner. L. The firm may reconsider their decision and uphold the complaint resulting in an offer of compensation. We then follow the process as noted in H. above. M. The firm may decline to address complaint points we have raised, and others points that have not been answered satisfactorily. In this instance we normally refer the matter to the Financial Ombudsman Service for their consideration. N. The Financial Ombudsman Service will uphold or decline the complaint. If the outcome is to uphold the claim, then the firm will issue their offer of compensation. We then follow the process as noted in H. above.

3 O. Claims referred to the Financial Ombudsman Service are considered by an Adjudicator, who may uphold or decline a complaint. If an Adjudicator declines a complaint, we can refer the issue for consideration to a senior member of staff including an Ombudsman. P. An Ombudsman will either uphold or decline a complaint. Fee Structure Our services are provided on a no win-no fee basis. We only issue an invoice for our fee when we have been successful and the claim is upheld. We do not charge an initial fee nor seek reimbursement for our costs whilst we are acting for a client. We charge 15% plus Valued Added Tax (VAT) at the prevailing rate. VAT is charged at 20% currently but this may be higher or lower at the time we raise an invoice. If the complaint is not upheld, we do not charge a fee. We, like you, are unable to predict how much compensation a claim may be worth. We do not wish to deter clients by imposing an initial fee or a minimum charge for services we are willing to undertake. Although our actual fee is impossible to forecast we have provided several examples to illustrate how variable it can be. Compensation Fee at 15% VAT at 20% Total Net amount retained by you There can be situations where a financial award is made but the sum offered is not paid directly to you. Lenders may use a compensation payment to reduce the amount outstanding on a credit facility. In other situations, an award may be used to repay debts in their entirety. This could mean you benefit financially but do not receive a payment sufficient to pay our fee. In order to highlight this situation, we set out an example as follows. Complaint is upheld and compensation, including net interest, is a total of Client s loan account is reduced by 2,800 and 200 is paid directly to him. Our fee is 540 including VAT. It is greater than the client s payment of 200. As a result, a client will need to pay 340 from other resources. In most instances where compensation is awarded there will be an element of interest that is added. Interest is usually paid net of basic rate tax at 20%. Non taxpayers are able to reclaim this deduction. Higher rate taxpayers need to declare the interest and pay any additional tax. Financial Hardship If you are in financial hardship, please advise us. We have separate details that explain whether our services are suitable. In brief we will not undertake a claim if as a consequence our fee would cause an additional or further financial burden. Complaints Procedure We strive to ensure that our clients have no cause for complaint in relation to the services we provide. In the unlikely event that you have a concern or wish to raise a complaint with regard to any service we have provided you may submit a formal complaint. This procedure sets out the process which should be followed.

4 1. Complaints may be made in writing, by letter or or by telephone or in person, in respect of a claims management service that we have provided and that is regulated under the Compensation Act In the first instance a complaint should be made to or addressed to: Carl de Lima, PPI Advice Ltd, 11A Woodside Road, West Moors, Ferndown, Dorset BH22 0LY Telephone number: carl@ppiadvice.uk.com 2. We will send you a written or electronic acknowledgement of a complaint within five business days of receipt, identifying the person who will be handling the complaint for the business together with a copy of our complaint handling procedures. Wherever feasible that person will not have been directly involved in the matter which is the subject of the complaint and will have authority to settle the matter. 3. Within eight weeks of receiving a complaint we will send you either: (a) a final response which adequately addresses the complaint (including contact details for the Legal Ombudsman should you wish to make a complaint to them) or (b) a response which: (i) explains why we are still not in a position to make a final response, giving reasons for the further delay and indicating when we expect to be able to provide a final response; (ii) informs you that you may refer the handling of the complaint to the Legal Ombudsman if you are dissatisfied with the response, the timeframe for doing so and full contact details. 4. Where we decide that redress is appropriate we will provide you with fair compensation for any acts or omissions for which we are responsible and will comply with any offer of redress which you accept. Appropriate redress will not always involve financial redress. 5. If you are not satisfied with our response, or if a complaint is not resolved after eight weeks, you may refer the complaint to: Legal Ombudsman, PO Box 6806, Wolverhampton WV1 9WJ cmc@legalombudsman.org.uk Tel: Any complaint must be referred to the Legal Ombudsman within six months of the date of our written final response. Data Protection We process information in accordance with the Data Protection Act 1998 and use personal details to assess your situation and conduct our services. We do not share client s personal details with any firm or individual except where it is necessary to do so in the course of providing our services. In providing your personal information you authorise us to process your details. If you provide information to us about another person you confirm they consent to us processing their personal details and that you collected the information on their behalf. You can request a copy of data we hold about you at any time. When the complaint process is completed we undertake to destroy your personal details. We are registered with the Information Commissioners Office: registration number ZA Regulation

5 PPI Advice Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities. Authorisation number CRM To confirm this authorisation, you can view a record on the website Guidance If after reading this guide you have any questions, please raise them. These notes are reviewed on a routine basis and details changed to reflect Regulatory updates. Last revision: 31st March 2016