12 January 2015
It is a mis-selling saga that has gripped the nation. It is a scandal that has rocked the British banking industry to its core, smashing the trust and loyalty people once felt towards their bank.
The mis-selling of an insurance product - payment protection insurance - designed to protect the very customers that banks are supposed to help and covet, has been an issue that has stayed around for a long time. With 2014 coming to a close, it seems that the PPI compensation journey is far from ending just yet.
But, it has had a positive effect on so many selling aspects…
We all know the frustration of buying a product, only for the sales person to try and sell us another product on top; rather like buying a new kettle in an electronics megastore only to get to the counter and be offered an extended warranty that costs more than the kettle…
The same used to happen with loans and such like. You would buy a loan, then the representative would suggest what a great idea it would be to insure the repayments, just in case you couldn't make a payment or a series of repayments for whatever reason.
And because you were in a highly charged emotional state (who wouldn't be? You need a new car so you can get to work or a bigger house or…), you probably mutely noted your head and bought that too, little realising that the product you had just bought was, to all intents and purposes, useless.
As a result of the PPI mis-selling scandal, this can no longer happen within the field of financial products. You arrange the loan etc…. and then you must be given at least 7 days before the bank or lender can off you anything else.
Another aspect of the mis-selling saga was the amount, or lack of, information that people were given about the insurance product… and their rights!
People often thought, for example, that they HAD to buy the bank's product and that no other insurance of the same type would do. Even if they had other insurance products such as income protection, customers were told that in some circumstances, they still needed PPI.
Fortunately, people are now more informed and more aware of their consumer rights. They now know that if the bank or lender does insist on some kind of insurance product to protect the loan etc. that the customer isperfectly entitled to shop around and purchase a product from elsewhere.