PPI (Payment Protection Insurance) has been a hot potato in the UK for some years. There has long been widespread concern that the insurance, frequently added on to loans, mortgages and overdrafts, was frequently sold in circumstances inappropriate to the needs of the customer, while offering disproportionately large benefits to the lender/insurance provider (especially banks). In consequence, there has in recent years been pressure on financial institutions to review their sales practice and repay customers for mis-sold PPI services.
In the last year or so, I’ve noticed an upsurge of nuisance messages relating to PPI rebates: these range from automated phone calls pressuring the recipient to press a button to talk to a salesman in order to meet a non-existent deadline for a non-existent claim, to calls from Indian call centres – those seem to have replaced support scams for a while, to Twitter and comment spam. (Actually, banks have been pushing for a deadline on payouts, but the automated messages I’ve heard have talked about ‘today’ or ‘tomorrow’, not April 2014…)
Strangely, given the quantity of comments I moderate, I hadn’t personally come across this as comment spam, but ESET Ireland‘s Urban Schrott sent me a link included in a comment to one of his own blogs. While I find it hard to put much faith in firms that advertise by comment spam and describe themselves as Mis-Selling Specialists, I can’t say it’s an out-and-out scam without further investigation: Permanent TSB is one of several lenders ordered by Ireland’s central bank to review all PPI sales since August 2007. However, there are some pretty good reasons for avoiding this kind of offer, even on the basis of No Win No Fee.
- Companies like this are charging heavily (25-30% or more) for doing something that people can do themselves for free.
- Some even ask for an upfront fee, and I’d be surprised if that often gets returned even if the bid is unsuccessful (and there’s no evidence that having a company do it for you will be more successful or less work).
- The company’s fee is likely to be X% of the whole of the mis-sold PPI, not just the amount paid to date.
- And there isn’t (in the UK, at any rate) much regulation of the claims industry, so getting money back from a rogue company is hard.
For more information on why using a claims company is usually a bad idea (and when it might not be a bad idea, Martin Lewis has examined the issue in some depth at MoneySavingExpert.com including this MSE Reclaim PPI for Free guide. Not to mention his 10 things you need to know if using a PPI claims firm blog. The main agency pressuring financial institutions to recognize legitimate PPI claims is the Financial Services Agency, which has a great deal of information on its web site.
Note, by the way, that PPI is quite different to income protection insurance, which is intended to protect the customer from lack of income, rather than protecting the lender. Though that doesn’t mean I’d necessarily recommend income protection either.
ESET Senior Research Fellow