Analysts consider how loan insurance compensation may be spent
by Luke Whitmore, 27th June 2011
Around 0.4 per cent of money spent by consumers this year could
have come from the banks in the form of mis-sold PPI compensation
payouts, it has been estimated.
Analysts claim that the payouts - which are expected to range
anywhere from £4 to £9 billion - are likely to boost consumer
spending, with one commentator expecting the household goods market
to see a sales increase of 3% for the year due to the increased
levels of expenditure from borrowers who have received compensation
for having PPI mis-sold to them.
Others anticipate that some of the recompense will end up being
used to pay off debt or loan arrears, with the consumers seeing
little material benefit as a result. Nonetheless, there will no
doubt be some increase in spending from those who do not have any
outstanding debts with their bank but have been mis-sold PPI
regardless.
PPI, or Payment Protection Insurance, is a widely mis-sold loan
insurance policy which many people have been dismayed to discover
they were paying for. Intended to cover the borrower in the event
of a loss of income which could result in them being unable to
continue the repayments on their loan, for many people the policies
turned out to be useless as their circumstances on taking out the
loan were such that they could never have made a successful claim
on the insurance.
The banks fought against the rights of consumers to claim
refunds for this widespread PPI mis-selling, but a recent judicial
review placed the responsibility for compensating their customers
squarely in their own laps, meaning that the banks have now had to
set aside billions of pounds for the millions of borrowers who were
made to pay for expensive and unnecessary policies merely as a
means of lining the banks' pockets.
It now seems likely that these payouts will be invigorating the
economy in the form of increased consumer spending in the latter
half of the year.
If you are looking to claim back PPI, we can help you make a PPI claim today.
Claims
Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010