Partner Article

Misleading Payment Protection Insurance Advert Banned by ASA

The latest development in the Payment Protection Insurance (or PPI) scandal occurred this week, as a radio advert was banned by a watchdog because it implied consumers had a limited amount of time to reclaim mis-sold PPI insurance.

Britain’s banks have been caught engaging in mis-selling of PPI insurance, and many people have claimed significant sums back from the banks. It’s set to continue, as the Financial Ombudsman said it was expecting to resolve three times as many cases in 2013 as it did in the current financial year. It means that in 2013 a record number of consumers will receive payments from banks for mis-sold payment protection insurance policies.

Most types of insurance claims have a chance of being accepted or rejected, but PPI claims have been rejected at a high level compared to other types of insurance, because PPI insurance was not underwritten at sales stage. Many people didn’t even realise they were paying PPI insurance as it was sold as part of their loan or credit card.

The Payment Protection Partnership is one of many commercial organisations that is hoping to capitalise on the PPI scandal, many consumers are complaining about being bombarded with cold calls from solicitors offering to handle PPI claims on their behalf. The companies will typically take the case to lenders on a no-win no-fee basis, claiming as much as a quarter of the payout if it arrives. Lenders, regulators and the government have all urged consumer to make PPI claims directly instead of using these third parties.

PPP’s radio advert advised customers that “time is running out” to make PPI claims. The Advertising Standards Authority (ASA) banned the ad because it “overstated the urgency for referring a complaint through PPP”. There is no deadline for filing claims about the mis-selling of Payment Protection Insurance.

PPP defended the ad, stating that a deadline had been set for six years’ time, after which providers were not obligated to provide details about their Payment Protection Insurance policies. After this consumers have to provide details of PPI agreements between themselves, PPP said in defence of the ad. The ASA argued that this time limit was not fixed because it ran from the end of the policy, not the start date.

This was posted in Bdaily's Members' News section by Alan Cairns .