STORE CARDS PPI
There is nothing more enjoyable for Brits than a spot retail therapy and to fund this many thousands of consumers took out store cards from high street retailers such as Debenhams, Top shop, Next or Mothercare as far back as the 1980s to early 2000. During this period most retailers sold PPI with their store cards either without the customer full knowledge or didn't adequately check their suitability for this type of insurance. This has meant that many thousands of consumers could be entitled to compensation for mis-sold PPI in the wake of the biggest mis-selling scandal to hit UK financial services industry.
What is Store Card PPI?
Store cards were a very lucrative option for the high street stores. They were sold to those who were either unwilling or unable to pay for their products in one go and made a profit through those who failed to pay off the entirety of the balance each month enacting interest charges of between 18 and 30 per cent. At their height, many thousands of store cards were sold with PPI often added to the equation.
Consumers who took out these store cards as long ago as the 1980s are unaware that they could be entitled to payouts.
Regulations were introduced in 2011 and since then store cards are nowhere near as prevalent in society. In these regulations, the government banned upfront discounts and commission being added to store cards, and enforced a seven-day cooling off period after any store card sale.
Store Card Retailers - Who Owns Who?
If you took out a store card before December 2011, you may be entitled to claim PPI compensation. Please see the list below of store card by retailer and how PPI was mis-sold by retailers.
GE Capital Store Cards
GE Capital was owned by the largest store card provider at the time, General Electric Consumer Finance UK. They supplied store cards for clothing retailers as well as department stores.
At one time GE Capital had approximately 50-70 per cent share of the store card market according to a report by the Competition Commission.
In 2008, however, Santander bought GE Capital’s store card business. As a result of the takeover, Santander Bank took responsibility for PPI complaints including those on historic store cards that had been provided by GE Capital or GE Money for the following clothing retailers and department stores:
- Asda Store Card
- B and Q Store Card
- Bentalls Store Card
- BHS Store Card
- Burton Store Card
- Comet Store Card
- Currys Store Card
- Dixons Store Card
- Debenhams Store Card
- Dorothy Perkins Store Card
- Edge Card Store Card
- Ernest Jones Store Card
- Etam Store Card
- Evans Store Card
- Fenwick Store Card
- First National Tricity Finance Store card
- First Personal Store Card
- GE Capital Store Card
- Halfords Store Card
- Harvey Nichols Store Card
- House of Fraser Store Card
- H Samuel Store Card
- Kwik Fit Store Card
- Laura Ashley Store Card
- Miss Selfridge Store Card
- Monsoon Store Card
- Mothercare Store Card
- Newday Ltd Store Card
- New Look Store Card (For certain New Look store cards, Santander and Ikano Bank are responsible. Both banks would need to be contacted to establish if you had PPI on your account, if you do not have any proof of who provided the initial account.)
- Outfit Store Card
- Paypal Store Card
- Principles Store Card
- QVC Store Card
- River Island Store Card
- Russell and Bromley Store Card
- Topshop Store Card
- Topman Store Card
- Toys R Us Store Card
- Wallis Store Card
- Wellbeck Store Card
About Ikano Bank Store cards PPI
This is a little-known brand name however, Ikano Bank are responsible for many store card brands that they provided accounts for, many of which may have had PPI. These include:
- Ikea Home Card
- Ikea Home Loan
- Leeds and Holbeck Personal Finance
- Leeds and Holbeck Personal Loan
- Leeds Personal Loan
- The Austin Reed Credit Card
- The CC Credit Card
- The CC Mimosa Card
- The Coast Card
- The Habitat Card
- The Habitat IFC
- The Habitat Interest Free Loan
- The Ikea Card
- The Karen Millen Card
- The Liberty Account Card
- The Liberty Card
- The Liberty Club Card
- The Liberty Interest Free Loan
- The New Look Card- see above entry for information
- The Oasis Card
- The Oasis VIP Card
- The Principles Card
- The Principles Visa Card
- Warehouse Fashions
Please note: Ikano Bank have not engaged in sales of new PPI policies after 23rd March 2009. Therefore, accounts with Ikano Bank taken out before 23 March 2009 can only be considered for having PPI sold with or added to.
Creation Store Card PPI
Creation provides credit cards, store cards and loans to UK consumers via well-known high street retailers.
Creation is formed of two separate companies:
- Creation Financial Services Ltd who issues store and credit cards &
- Creation Consumer Finance Ltd who provides personal loans
Both companies trade under the name Creation and are responsible for providing finance through store card brands such as:
- Creation Financial Services Limited
- Creation Consumer Finance Limited
- Everton Football Club
- PC World
- Wolverhampton Wanderers
- West Bromwich Albion and more
Other Store Card Providers
- Marks & Spencer (M&S) Store Card PPI – PPI complaints and the sale of PPI on store and credit cards are the responsibility of M&S, who in 2004 had a deal with HSBC to operate the store card and credit card facility.
- John Lewis Partnership (JLP) Store Card PPI – All PPI sale and PPI complaints on John Lewis store cards and credit cards are the responsibility of JPL. In 2004 John Lewis had an agreement with HSBC to operate the store and credit card side of things.
- Argos Store Card PPI – Argos is owned by The Home Retail Group. However, in 2016 Sainsbury’s bought out the Home Retail Group.
Responsibility for PPI sales and complaints on Argos store cards still rests with Argos, despite Sainsbury’s now owning the company.
- Homebase Store Card PPI – Homebase was owned by Home Retail Group until 2016. All PPI sales and PPI complaints for Homebase store and credit cards still need to be taken up with Home Retail Group.
It is worth mentioning that some of the above-mentioned brands that Creation have provided store cards for, have used other lenders when providing store cards for customers. This can lead to much confusion when it comes to figuring out if the store card you had did have PPI.
Please contact us to carry out a free PPI check if you would like to check if your store card had PPI attached to it, we will be happy to help.
While there are a lot of store card names and lenders listed above, that were sold with PPI or PPI was added to, this is not a complete list. If you need further information or assistance regarding your store card lender or provider, refer to our lender pages or get in touch.
Store Card PPI Charges & Costs
PPI on store cards, it has been established, is costlier than on credit cards. This is because of the higher rates of interest charged on store cards than on credit cards. This has a direct effect on the amount of PPI charged as the PPI is calculated using the interest rate as a percentage of the outstanding monthly balance.
PPI on store cards is paid for on a monthly basis by paying a monthly premium, like credit card PPI. The cost is made up of three sums, which combined makes up the total cost of store card PPI.
The three parts consist of:
- PPI premiums on store cards are worked out as a percentage of the amount outstanding on the store card each month. Typical charges by lenders can be up to £1.50 for PPI on every £100 of debt on the store card. This is compared to a typical charge of 79p for PPI on every £100 of debt on a credit card.
- Interest is charged in addition to the monthly store card PPI premium, the rate of which is the same that is charged for the outstanding balance on the store card if PPI had not been added.
- If payments have been missed, further charges may be incurred to the store card account. If PPI has been added to the account, the charges will be higher than if PPI wasn’t added to the account, leaving the account holder with a bigger debt.
The above illustration shows that the amount of PPI stated by a lender on a store card is the first part of working out the PPI cost. The reason is that when the PPI premium is added to the outstanding balance on the store card, it increases the cost of PPI substantially. This is due to outstanding balances on store cards incurring interest rates of over 15% on top of what lenders would charge for credit card interest.
A report published by the Citizens Advice Bureaux (CAB) in 2005 titled Protection Racket highlighted concerns the CAB had in relation to PPI and how it was sold.
The report identified PPI policies offered by some of the UK's largest credit card lenders only providing 12 months payments maximum if the policy were needed by policyholder due to unemployment.
The monthly benefit received from the PPI policy would only cover a maximum of 10% of the outstanding balance.
This crucial information was not being passed on to customers when the PPI was being sold with their credit cards and in many cases, customers were not aware of what they were buying. Some later found that they had PPI but were completely unaware that it had been added.
How to Make store card PPI complaint?
If you believe that you have been mis-sold PPI, you should make a complaint to the company that sold you the initial product. However, you will need to find out and complain to the provider of the card, not the store that used them.
If your complaint is rejected, it can be referred to the Financial Ombudsman Service (FOS), who have the power to overturn this rejection.
However, there is a small issue with this, as the FOS has no power to deal with complaints made against Santander UK for PPI sold before 14 January 2005.
Can I complain about store card PPI claim to the FOS?
The answer is no because many of store cards operated through a company called GE Money which was then bought out by Santander UK.
The Ombudsman is unable to consider PPI complaints rejected by Santander UK on store cards sold before 14 January 2005.
Jon Platt, the founder of claims management firm JMP Partnership, explained that the Ombudsman does not always have the jurisdiction to consider rejected PPI complaints.
“Historic store card complaints will often be rejected by Santander UK, which has been by far the largest provider of store card credit after it took over GE Capital.
"What many consumers don’t realise is that the Ombudsman will only look at complaints attached to certain firms from certain dates.”
Who else can you complain to about store card PPI?
Luckily, there is an alternative option: write to the underwriter who had responsibility for ensuring PPI was appropriate for you at the time.
Any store cards sold by GE Money before the cut-off point in January 2005 were underwritten by Genworth Financial Insurance, which still exists. If you take your complaint to them, they are obligated to consider it again.
This company is under the jurisdiction of the FOS for any complaints dating back to the 1980s.
Platt explained: “There is an agency relationship here which makes Genworth responsible for all the misdeeds of Santander UK, as it is a long-standing member of the General Insurance Standards Council.”
Genworth may decide to reject your complaint, but you can then refer this to the FOS. Platt says he has seen many cases where Santander UK has decided to reverse its decision after a complaint was made to Genworth.
What Santander UK says about store card PPI claims?
A spokesperson for Santander UK said that it did not make its decisions based on if they could be referred to the FOS, and denied that Genworth had any impact on their choice to reverse decisions in the past.
But he did say the complaints were eventually deemed to be valid: "In both instances the cases were re-reviewed leading to these complaints being upheld."
He added: “If a customer or their representative responds to us challenging our initial decisions, and we do provide opportunity for complainants to come back to us if they feel there is new information or we have overlooked anything, then we will always take the opportunity to review the full circumstances of the case again to ensure we have reached the right outcome.
"In a small number of cases, such as these this can result in us changing our original decision.”