The Citizens Advice Bureau (CAB) provides advice that is free, confidential and independent to help people overcome their problems. They are a voice on issues that matter to people and have strong roots in local communities.
If they identify an area where consumers are being treated unfairly by big corporations, the Citizens Advice will launch awareness campaigns to help as many affected people as possible. On rare occasions, if the situation requires it, action is taken by the Citizens Advice to encourage action to change what is affecting many people.
CAB and Mis-sold PPI
Once such action led to something being done about the PPI mis-selling scandal.
In 2004 Vince Cable, then Lib Dem Treasury spokesman, demanded an investigation into ‘inflated premiums and anti-competitive behaviour.’ A year later the Citizens Advice Bureau intensified the pressure for an investigation by releasing their own findings on PPI and how PPI had been sold after completing a survey of CAB clients.
The CAB survey of client debt started in 2001 and found 85 per cent had been unsuccessful in claiming on a PPI policy. Comparatively industry figures show that 85 per cent of claims were successful. This suggests that PPI is a problem for those who face financial and social exclusion as they are vulnerable borrowers who face financial difficulties.
There were four key areas highlighted:
- Expensive prices – with premiums often adding 20% to the cost of a loan, and in the worst cases over 50%.
- Ineffective policy structure – designed to exclude people from cover or limiting the chances of a pay-out to someone who was genuinely ill.
- Mis-sold policies to consumers – these were often ineffective and without the customers knowledge / consent. They were sold as mandatory instead of optional, or sold to people such as the self-employed who would never be able to claim.
- Inefficient PPI complaint handling procedures – claimants facing delays or complicated claims procedures, leading to further indebtedness and court action. Some borrowers couldn’t successfully claim on their PPI policy due to requirements for medical evidence that were unreasonable. Some CAB clients couldn’t afford getting medical evidence, so this was a barrier to claiming.