Payment Protection Insurance scandal leads to payouts
by Luke Whitmore, 19th May 2011
The PPI mis-selling scandal has resulted in thousands of
consumers complaining to their banks for refunds, in a move
long-anticipated by financial analysts.
Despite warnings from the FSA, the banks put PPI reclaiming on
hold as they fought an ultimately unsuccessful court case against
new regulations which would see them legally obliged to offer
redress to customers who had been incorrectly sold the
insurance.
But high-street banks capitulated last week, declaring that they
would not appeal against the court ruling against them and
announcing the initial provisions that would be made for PPI
compensation. This compensation fund currently totals over £5
billion, demonstrating the extent of PPI mis-selling at its
height.
PPI - or Payment Protection Insurance - should by all accounts
be an innocuous product. A form of loan insurance, it was
originally intended to provide protection for a borrower should
they suffer an unexpected loss of income. The insurance was
intended to kick in should they ever need help making the
repayments on their loan, ensuring their financial security.
But PPI became an unrivalled means of making profit off of
borrowers when banks became to systemically mis-sell the product to
customers who had no use for it and in some cases did not even ask
for it. Despite practically cheating people out of their money, the
banks would often dismiss complaints over these practices or offer
consumers a refund far lower than that which they were entitled
to.
Now banks are being forced to reassess their entire history of
PPI selling, with new rules from the Financial Services Authority
which are being applied retroactively and meaning that banks will
be forced to pay out compensation to customers who have been
victims of PPI mis-selling.
Despite this, the banks are already finding loopholes, with some
refusing to reevaluate the claims of customers whose original
complaints were denied - even though the standards by which cases
are judged has changed since then.
If you have been a victim of this scandal, we can help you reclaim PPI.
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