Could a redrawing of the Financial Services Compensation Scheme boundaries save brokers from a repeat of the adverse financial impact of the payment protection insurance mis-selling scandal?
It is said that time heals all wounds, but an insurance broker only has to look at the effects of the payment protection insurance mis-selling scandal to quash that cliché.
It's been more than six years since the issue came to light and, despite the fact that they are not largely responsible for PPI mis-selling, insurance brokers continue to be burdened by the mistakes of other financial sector intermediaries.
Total PPI refunds have now topped £4bn and the Financial Ombudsman Service receives up to 1000 PPI-related complaints a day. And it's showing no sign of abating.
Rising demand
In response to demand, the FOS has already recruited 600 additional staff this year, bringing the total to 2000, with plans to employ a further 500 before the end of 2012.
Furthermore, in April it introduced a £350 supplementary case fee for businesses for each PPI mis-selling case referred to the service, chargeable to businesses involved in more than 25 PPI cases a year.
The Financial Services Compensation Scheme has also made changes to cope with the rising number of complaints. In2010/2011 it increased levies on businesses in the general insurance intermediation subclass by £52.9m, bringing the total to £61.4m.
Read more: http://www.postonline.co.uk/post/feature/2192541/payment-protection-insurance-ringing-the-changes#ixzz22m1L8JJ2
Monday, 6 August 2012
Money matters
I WAS very interested in an article I saw via Twitter earlier this week from one of our followers.
As we have been very vocal about in this column before , it's incredibly important that you have exhausted "every" single avenue first before taking out a payday loan. The loan must be for an amount of money you can pay back comfortably and ask yourself, is it absolutely necessary?
Payday loans should only be used for very small loans over very short periods of time. Increasingly, we are seeing more and more people getting in trouble with payday loan companies.
A payday loan company's typical client, according to leading consumer borrowing champion Zero-Credit, takes out six loans in 12 months. So you can see that the ease of access to cash can cause habitual, if not addictive, usage.
However, there is now the threat of an even bigger menace, with the emergence of the one-year, online, instant loan market, with online companies providing one-year loans up to 278% APR ! A £1,000 loan charged at 278% equates to a total charge of £2,028. A one-year loan of £1,000 through a mainstream bank with a fixed APR of 18.6% equates to a total of £1,104 repaid at the end of the term, leaving the client a staggering difference of £924 better off compared to the online instant loan.
Read more - http://www.thisisnottingham.co.uk/Money-matters/story-16624949-detail/story.html
As we have been very vocal about in this column before , it's incredibly important that you have exhausted "every" single avenue first before taking out a payday loan. The loan must be for an amount of money you can pay back comfortably and ask yourself, is it absolutely necessary?
Payday loans should only be used for very small loans over very short periods of time. Increasingly, we are seeing more and more people getting in trouble with payday loan companies.
A payday loan company's typical client, according to leading consumer borrowing champion Zero-Credit, takes out six loans in 12 months. So you can see that the ease of access to cash can cause habitual, if not addictive, usage.
However, there is now the threat of an even bigger menace, with the emergence of the one-year, online, instant loan market, with online companies providing one-year loans up to 278% APR ! A £1,000 loan charged at 278% equates to a total charge of £2,028. A one-year loan of £1,000 through a mainstream bank with a fixed APR of 18.6% equates to a total of £1,104 repaid at the end of the term, leaving the client a staggering difference of £924 better off compared to the online instant loan.
Read more - http://www.thisisnottingham.co.uk/Money-matters/story-16624949-detail/story.html
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