Banks pay out over mis-sold PPI

Billions of pounds in compensation for customers

by Russell Shackleford, 11th July 2011

PPI, or Payment Protection Insurance, has been found to have been mis-sold to millions of bank customers - and billions of pounds in compensation payouts are in the pipeline as a result.

Mis-sold PPI occurred as a result of insurance brokers offering the insurance to the majority of people taking out a loan product of any kind, ranging from mortgages to credit cards. However, this proved to be inappropriate as the majority of people sold the policies were not eligible to ever make a claim even if they did need to do so.

Intended to ensure that borrowers were able to keep up repayments on a loan even in the case of an unexpected drop in income, PPI instead became a drain on the finances of millions of innocent consumers, many of whom discovered that they were not covered by their policies only when they tried to claim on them - not to mention the vast number of people who continued paying for a policy without knowing it was useless, or without realising they had been lumbered with it at all.

Fortunately, it became a point of contention between financial watchdogs and the banks, and the Financial Services Authority (FSA) eventually introduced new regulations which required the banks to offer compensation to customers who had had the insurance sold to them wrongly. After a lengthy court battle, the mis-sold PPI battle was won, with the FSA emerging victorious and the cowed banks burdened with the responsibility of offering payouts in recompense to ill-treated customers.

It is now the case that billions of pounds has been set aside, waiting to be claimed by customers, and if you have been mis-sold PPI alongside a loan, you could be entitled to a slice of this money pie. Be sure you don't miss out, and make sure you weren't a victim of the mis-sold PPI scandal.

If you are looking to make a case for compensation, we can help you with your PPI claim.

Claims Financial