Bank customers profiting from PPI scandal

Consumer claims inexorable

by Max Brazelton, 15th September 2011

The flow of money from the coffers of the UK's leading banks into the hands of their customers through PPI compensation claims shows no sign of relenting.

A huge number of consumers have been able to claim large amounts in compensation after discovering that they had been mis-sold the product of PPI (Payment Protection Insurance).

PPI is designed to provide protection to customers who find themselves in the situation of not being able to honour payments due to some calamity such as losing one's job or becoming incapacitated. To all intents and purposes it can serve as a useful product if sold to the right person.

It has come to light, however, that nearly every financial institution in the land has been guilty of mis-selling the product. A ruling by the FSA obliging the banks to compensate any customer to which PPI was mis-sold has opened the proverbial floodgates for complaints and subsequent compensation claims, and the banks have been forced to set aside colossal amounts of money to handle this avalanche of disgruntlement.

Customers have been able to reclaim mis-sold PPI on a wide range of grounds. That is, there are many different scenarios in which a mis-sale of PPI may have occurred and many ways in which mis-selling can be defined.

These include but are not restricted to: the customer not being made aware that they were paying for the product by the bank, the customer being led to believe that it was compulsory to take out the product and the bank selling the product to the consumer when they knew full well that they were not eligible to claim on it.

This scandal has understandably dented the reputation of the nation's lenders, and the claims for compensation are not letting up as more and more people get wind of the possibility of winning back a handsome bounty.