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Consumer Law Blog

A fresh look at the PPI scandal

by Bradley Askew 02 December 2011

The fragile social and economic situation in the UK which resulted from the recession has affected many people. The media tells us daily about the lack of jobs and opportunities, as well as the brittle state of people's finances as they struggle to find ways to continue paying the mortgage and provide for themselves and their families.

At times like this, people look to find any means to earn money and often look to banks for financial guidance and loans. As it turns out though, due to a grievous error made by the banks, people can also look to them for compensation.

It is not often that people can claim compensation for a bank's mistakes, but a thorough investigation by a number of regulatory entities has uncovered a scam perpetrated by a variety of respected banks and financial institutions, leaving a huge number of victims in its wake.

If a person has taken out a loan, a credit card or mortgage then it is entirely possible that they have been mis-sold insurance, Payment Protection Insurance (or PPI, as it is commonly referred to), which is a type of cover that was created to help people keep up with their loan or credit card repayments when they had problems doing so (through a redundancy or a long term illness, for example).

As it turns out though, when a number of people tried to claim under the policy, they were refused because the policy didn't actually take them into consideration and was worthless to them, despite their contributing to continuous monthly payments.

A lot of people who took out one of the above services from the banks are unaware that they were mis-sold PPI due to how the policy was implemented with their loan, mortgage or credit card. It was usually the case that PPI was included as standard, and it was left up to the customer to notice it and demand that it was removed from their agreement.

It is important to note that some PPI policies are not fraudulent and some are wholly justified, but nothing should stop a person investigating a possible claim if they feel they may have been the victim of this far-reaching PPI scam.

If a customer has taken out any services from the banks to do with credit cards, loans or mortgages and were told that PPI was compulsory, it could make a real difference to their bank balance to claim compensation for what has been deemed a highly fraudulent policy that was unleashed by the banks and lenders.

There is a certain procedure that a person must follow to start their claim, and this usually begins with a letter to the bank which presents them with the claimant's argument for why they believe they have been mis-sold PPI, including any information that may be relevant to the claim.

In the event that the claim is dismissed, it could be the case that taking the issue to the Financial Ombudsman Service could be the next important step.

Using a claims management company like Claims Financial could relieve the stress of fighting the banks and can certainly help things go smoothly should complications arise.

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