In this article I am going to explain what the financial ombudsman service is and how it helps people in everyday life.

The Financial Ombudsman Service is a government run and funded organisation that was set up in 2001 as a result of the Financial Services Market Act 2000 to help the public with taking complaints against banks and building society.

The main aims of the FOS is to deal with complaints that a client has made to a Bank, Building Society or a financial organisation and has failed to come to a decisions that suits both parties. Then you have the right to take the matter to the Financial Ombudsman Service.

When a person isn’t happy with how complaint was dealt with or that their final decisions were incorrect they have the right within six months of a final decision letter being issued to pass it over to the Financial Ombudsman Service. Once they have made their case to the FOS and filled in the required detail either by hand or over the phone the FOS will then contact the Bank or lender and request their side of the story. Once the FOS has all sides of the story they will then make a decision to which party they can see has handled the complaint properly and fairly and rule in their favour.

This process can take between three to six months and in some rare cases over a year to come to a decision.

Once the decision is made they will inform both parties of the outcome. Once the verdict is made if you choose to accept the decision then the results are binding on you and the company you made the complaint about.

PPI is an abbreviation for payment protection insurance. It is commonly purchased with loans, mortgages and credit cards but can also be found in overdrafts and car finance policies.

PPI is sometimes a standalone policy that it taken out with a financial institution and used if the client is unable to pay his or her monthly payment be they on a credit card or loan due to accident, sickness or unemployment and will be set down on how long it will cover the client for.

The main benefit for these policies is if you have a large financial commitment and suddenly become unemployed then you can contact the company you have the policy with and make a claim on the policy enabling for your mortgage to be continue to be paid on time for a set period of time thereby saving you from financial difficulty.

PPI works on the same basics for credit cards but won’t pay the full amount for you just the minimum balance due each month. The difference between credit card payment protection and loan and mortgage protection is that it is a considerable smaller monthly payment.

PPI can be sold in many forms in some case it is an upfront fee of a certain amount or can be a monthly payment of a certain amount and in some cases it can depend on how much you spend each month.

There have been many cases these past couple of years of miss sold PPI where people were led to believe that they wouldn’t get the loan or mortgage or credit card if they didn’t take out this policy or where people have been sold a policy where if the need should arise that they need to claim on the policy won’t be able to provide what it says.

This has led to people being discouraged from taking Payment Protection Insurance and a ban on the sale of PPI at the same time as selling a loan.

Payment protection insurance is more commonly known as PPI. PPI can be found in credit cards, loans and mortgages they can also be found in overdraft from bank and lease for car loans.

There are a number of ways to make a claim you can either do it yourself by finding a template to structure your complaint and filling in the details and sending if to the Bank or Building Society. These templates can be found on the internet provided by various organisations or you can use a claims management company.

With claims management companies make sure that they regulated which means that they are trained and qualified to take make complaints on your behalf against banks and building Societies. Do be warned that claims management companies do charge a fee for this service they provide which is charged at the end of process were you have been made an offer.

Once you have made the complaint the Bank or Building Society will issue out an acknowledgement of receiving your complaint and will then give you a time frame on how long they take to investigate the complaint. They may later on ask you to fill out a questionnaire it will either be one of their questionnaires or be what is known as a FOS Questionnaire which stands for Financial Ombudsman Service.

Once their given time has finished they will either proceed by doing one of the following

• Make an offer
• Reject the complaint
• State that they cannot find your name or policy number in their system
• Fail to issue a response

If they make an offer they will give you a breakdown of the offer for example your PPI cost were £200 and they offer additional 8% interest on this making the total offer £216. This is when you have to consider if this is a fair offer if you are doing this via a claims management company they will already have calculated if this a fair offer or not and advised you on this matter.

If you believe this is a fair offer or the claims management company has advised you that this is a fair offer you then fill in the acceptance from provided to you and then they will issue you, your compensation to by either a check or bank transfer.

If they state that they cannot find your name or policy number in their system you will then need to find your documentation and provided copies to them showing that you are a customer and making them reopen your complaint.

If they reject the complaint, don’t respond to your complaint letter this where you have the option to take this matter to what is known as the Financial Ombudsman Service. The financial ombudsman service is a government run organisation which has been put in place to settle financial complaints that you are unable to sort out yourself.

The business of payment protection insurance appears to be constantly under fire because of massive and widespread accounts of misselling PPI. Instead of being the useful payment insurance product that it was designed to be when it was first conceptualized, more and more people are looking at it with disdain. At the same time, more people are becoming part of the rejected PPI claims statistic, which is a bad thing, of course.

So is there any way to avoid being a victim of advantageous lenders who engage in the practice known as misselling PPI? It’s easier said than done, but it’s definitely doable as long as the borrower knows what constitutes as an act of misselling PPI. Borrowers can suffer from missold PPI way before they even think of signing up for payment protection insurance. Banks and other financial institutions who give out loans to borrowers have become so good at misselling PPI that a borrower often has no clue that he or she has been victimized until they file for PPI claims and get rejected. It is often only at this time that borrowers find out that they have been a victim of missold PPI. Now the big question is, how can it be stopped?

First, a borrower has to understand what exactly happens when a lender engages in misselling PPI. If payment protection insurance was sold under the guise of another insurance product or was said to be mandatory with a particular loan, then that probably counts as misselling PPI. If a borrower wasn’t told of alternative sources of cover or other places to purchase payment protection insurance from, he or she may have been a victim of PPI misselling.

In some cases, a policy may not cover certain individuals. Individuals like students, the unemployed, the self-employed, or retired people may not be covered by certain policies. With cases like this, PPI claims often get rejected.  The borrower suffers the consequences because they were not told about these things in the policy.

Lenders may also engage in misselling PPI by means other than the ones that have been mentioned above. If a borrower is given payment protection insurance but not told about it or was forced to purchase it even though the borrower has no knowledge about how it works, then that counts as a case of missold PPI. If a lender fails to inquire about existing medical conditions that a borrower may have that might prevent him for her from successfully filing PPI claims, that would likely count as a case of missold PPI as well.

To fully get rid of this truly unethical practice, we would need to stop it at the source. In other words, until the banks and other financial institutions that issue loans stop doing this to borrowers, we may never see the end of it. It may be a bit hard to overcome greed but the fact is, cases of missold PPI will never stop as long as lenders put more interest in profiting from their customers than in providing excellent service.

Currently, the movement to counter PPI misselling is gaining steam and less people are becoming victims of it. Perhaps, some day the payment protection insurance industry will finally be able to get rid of this cause of controversy. Many major institutions are already joining consumers and borrowers in the fight against PPI misselling so the future really looks brighter as far as the payment protection insurance industry is concerned.

At the end of the day though, the borrowers themselves should be well aware of what is going on around them and know the ins-and-outs of payment protection insurance to help get rid of the shady lenders that engage in misselling PPI.