Payment Protection Insurance compensation skyrockets
by Russell Shackleford, 9th June 2011
The banks will have to pay out billions in compensation for
customers who were mis-sold PPI, it has been estimated.
PPI, or Payment Protection Insurance, is a form of loan
insurance which was wrongly sold to millions of borrowers alongside
their loans. PPI can be useful in specific circumstances, but many
people found that they were paying for policies which were not
applicable to their situations, meaning they could never make a
successful claim, or that they were already covered by other
insurance policies they had taken out.
Some even discovered that they had had PPI added to the cost of
their loans without being told, or were informed it was necessary
if they wanted the money.
When the Financial Services Authority laid down common-sense
rules on PPI mis-selling as new regulations which the banks were
required to apply retroactively, the British Bankers' Association
took them to court over this.
The BBA's argument was that it was unfair to apply these new
rules to sales in the past - but as much of PPI mis-selling went
against what lending institutions should have been doing in the
first place, involving misleading their customers and not providing
adequate information about the policies, the court case was decided
against them.
It soon became clear exactly why the banks had protested the new
regulations, as their new responsibilities to compensate consumers
led to a necessity to set aside billions of pounds in potential
redress for those who had been paying for mis-sold PPI.
While it was known that the mis-selling of PPI had been an
epidemic, it was not clear until the banks began to release
estimates of how much they could have to pay out exactly how much
PPI had been knowingly mis-sold. Fortunately, consumers are now
able to claim compensation if they have been shelling out for
expensive and useless PPI policies.
If you were mis-sold a policy, we can help you claim PPI
compensation.
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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