Finance Matters

Posts Tagged ‘consultation’

Compensation paid to consumers who were mis-sold Payment Protection Insurance (PPI) reached a record £379m in November, compared with £268m in October.

PPI was routinely sold alongside loans to protect re-payments if the customer fell ill or became unemployed, but many people were sold policies that were invalid because they did not meet the qualifying criteria.

Lenders were under commission for every PPI policy they sold which led to some salespeople misleading customers by telling them that the loan would not be authorised unless PPI was taken out.

Millions of consumers were mis-sold PPI and it is estimated that up to £9bn will be paid out in compensation.

The number of PPI complaints received by the Financial Ombudsman Service (FOS) increased by 10 per cent to 55,907 in the final three months of 2011, compared with the previous quarter.

In November the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) launched a joint consultation on how to prevent the problems associated with PPI being repeated in the replacement products being brought to market.

The consultation closed on 13 January 2012 and specialist Lloyd’s insurer, Jubilee, is pressing for the two agencies to provide regulatory certainty in order to allow the PPI market to grow.

Jubilee’s head of personal lines, Chris Biles, said: “Anything which helps to clarify the responsibilities of both distributor and insurer has to be welcomed.

“But the FSA and OFT must recognise that there is a clear role for both lenders and insurers in helping to ensure that borrowers have access to appropriate ways of reducing the risk of being unable to maintain financial commitments.

“The key will be that any solution is designed to be easily understood and matched to the specific needs of the customer.”

It looks like all of the pressure opponents of the SOPA bill have been applying is making a difference.

Representative Lamar Smith, the congressman who introduced the highly contested bill, announced today that one of the most controversial provisions in the bill will be removed.

His office released a statement .that read, “After consultation with industry groups across the country I feel we should remove Domain Name System Blocking from the Stop Online Piracy Act so that the Committee can further examine the issues surrounding this provision.”

This means that Reddit or Facebook cannot have their domain name blocked simply because one of their users is accused of stealing IP.

It’s a major victory — if the final bill truly reflects this change. However we think readers should note that this likely means he didn’t have the votes to get it out of the U.S. House Judiciary Committee unless he amended the bill to ease the concerns of other committee members who may be facing tough re-election campaigns.

Pay attention to the version of the bill that leaves the House floor, if one makes it that far.

This was released on the Friday before a three day weekend after all… 

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See Also:

• The Senator Behind The Controversial PIPA Legislation Is Thankfully Starting To Backpedal
• HOW CONGRESS IS PREPARING TO DESTROY THE INTERNET: These Popular Sites Could Be Screwed By SOPA
• The Craze That’s Taking Over Tech People On Twitter Today

The government has announced a review of its Support for Mortgage Interest scheme (SMI), which helps people receiving certain benefits if they are finding it difficult to pay their mortgage interest.

SMI, which is available to people on benefits such as Income Support, Income-based Jobseeker’s Allowance and Pension Credits, costs the Government around £400 million annually.

It helps prevent home owners having to either sell their home or have it repossessed if they are unable to meet their interest payments.

Currently, the maximum SMI payment is £139 per week for mortgages of up to £200,000 and interest is paid at the Bank of England’s published average mortgage rate.

The government has now launched a consultation amid concern that SMI is being used as a long-term option, rather than as short-term help while homeowners resolve their difficulties.

It believes that the system is unsustainable in its current form and is considering whether the taxpayer should be able to recoup some of the costs of the scheme.

There is currently no limit on how long SMI can be claimed by people on income support, pension credit or employment and support allowance, and views are being sought on whether a charge should be levied on a property after the owner has received SMI for a specified period of time.

The homeowner would have to give up some of the proceeds of a sale of the property in order to pay back this charge to the taxpayer.

There is already a limit of two years for certain people on jobseeker’s allowance to claim SMI and one option being considered is whether this limit should be extended to all people on jobseeker’s allowance.

Lord Freud, Minister for Welfare Reform, said: “We are committed to supporting homeowners to stay in their own homes when times are hard.

“But in the future this type of support must be fair and affordable so we are seeking views from experts and the wider public, including options for putting a charge on the homes of future claimants so when they sell up we can recoup some of the costs.”

Recent research indicated that difficulty in securing a mortgage, and the high costs involved, are making people less excited about the prospect of owning their own home.

The possibility of a reduction in support for property owners who fall into difficulty can only dampen enthusiasm even further.

In today’s Budget, Chancellor George Osborne confirmed that the new flat-rate state pension will be brought in but will take many years to come into force. According to the Government, the new pensions system should make pension planning easier to understand – stripping out the current complex means-tested payments system and will move towards a [...]

The Financial Services Authority (FSA), has announced a delay on its plans to reform the Payment Protection Insurance (PPI) market.
The City Watchdog said its consultation will be delayed by six weeks due to a heavy amount of criticism from the financial industry.
Under a PPI policy, an agreed sum of money is paid out each month [...]