The PPI mis-selling scandal and its aftereffects

Billions of consumers seek compensation from banks

by Russell Shackleford, 22nd September 2011

PPI has been mis-sold to millions of borrowers alongside their loans, but after the FSA ruling earlier this year, they are finally able to claim back the money that they are owed by the banks who wronged them thusly.

Many people found after taking out loans that these loans had had loan insurance packaged with them, which for many customers was not of any use and was in fact worthless. Millions of people paid premiums for such packages without realising that they were shelling out for a service which was utterly pointless to them and did not serve their needs.

High street banks and greedy insurance brokers loved mis-sold PPI as it allowed them to make a large profit without offering anything in return - despite the fact that PPI was intended to protect people who had taken out a loan and ensure they were able to continue the repayments in the event that they should suffer a sudden loss of income, the outcome of mis-sold PPI was that most of those who were paying for a policy were ineligible to claim due to their personal circumstances, or had not in fact needed a PPI package in the first place due to coverage from elsewhere or simply not wanting one.

Fortunately, after the FSA underwent a judicial review earlier this year, the banks were legally tasked with the requirement of offering redress to customers who had been wronged by their ill treatment of the matter under scrutinity in this particular case.

Billions of pounds have now been set aside by the majority of financial institutions in order to offer maltreated clients who were mis-sold PPI the opportunity to claim back the cash which they paid out for a useless, unwanted or unnecessary service. It has yet to be seen how easy it will be for these individuals to claim, however.