Mis-sold PPI still causing problems

Banks yet to pay out to many customers

by Russell Shackleford, 10th October 2011

PPI, or Payment Protection Insurance, is no longer being mis-sold by banks and other financial institutions, but the repercussions are still making themselves felt, with billions of pounds being paid out by high street banks to customers who were ripped off, and yet millions of consumers still left uncompensated.

The cause of mis-sold PPI was financial institutions seeking to line their own pockets by offering loan insurance, also known as PPI, to all comers, whether they needed it or not and regardless of the suitability of the policy. Many used underhanded tactics such as telling customers that PPI would increase their chances of being approved for a loan or misleading them about its uses.

Some unfortunate customers, in fact, saw the most scandalous behaviour of the mis-sold PPI fiasco, in which they simply had the cost of the PPI added to the sum of their loan without being informed that it was there at all, or that it was optional. This was sometimes achieved by advertised a "fully protected loan", without explaining that the protection was completely optional and may not have been of use to anyone.

It was due to this that the mis-sold PPI scandal arose, with billions of pounds essentially stolen from customers in exchange for little or no service. Eventually this came to the attention of financial regulatory bodies, and after several years of wrangling which ended in a mighty showdown in the form of a judicial review, where the banks lost and were placed in the unenviable yet deserved position of having to pay back the billions of pounds which they had managed to fleece their customers out of.

Nowadays, many people are making claims for mis-sold PPI, hoping that they will be able to claim back any money that their lost to the phoney loan insurance.