Banks' finances drained by PPI scandal

Billions of pounds in payouts for wronged consumers

by Russell Shackleford, 18th July 2011

The mis-sold PPI scandal has had a massive effect on the finances of the various banks and finances involved, it has been revealed.

The scale of the mis-selling of PPI (Payment Protection Insurance), a form of loan insurance, has seen billions of pounds of money being set aside to ensure that the banks are able to meet their responsibility to offer redress to customers who were wronged. Millions of people have been sold these useless policies, which in many cases they did not know they were paying for or which would never have paid out even if they did need the insurance.

PPI was offered alongside many loan products, including such things as mortgages and credit cards. For some people, it may be a useful policy to have in place, but many have claimed that they were encouraged to take it out without having it properly explained to them - and later found that they were ineligible for the PPI and should never have been sold it.

After extensive legal wrangling on the part of the banks, they were forced to surrender and now bear the responsibility to offer compensation to customers who have paid sky-high fees for useless mis-sold PPI policies.

There are a wide variety of reasons why an individual may be unable to claim on a PPI policy, and a variety of different exclusions which can render a PPI policy completely useless for an individual. Essentially, only healthy people who were in full-time employment at the time of taking out the policy are eligible to claim on it - and even in those situations there may sometimes be exceptions.

Billions of pounds of the banks' ill-gotten gains are soon set to be handed out to customers who were wronged, so it seems that in this case consumer justice has been seen to prevail.

If you were wronged in this scandal, we can help you claim back PPI.

Claims Financial