PPI claims from banks could take months

Payouts of PPI compensation could go on for five years

by Luke Whitmore, 16th May 2011

The banks are set to start compensating millions of customers who were mis-sold PPI, with payouts expected to begin within the next few months after a court ruled that the banks were in the wrong.

High-street banking institutions have declaring they are setting aside billions of pounds to pay out to customers, after their loss in court left banks facing an enormous bill as recompense for industry-wide mis-selling of Payment Protection Insurance policies.

Payment Protection Insurance (PPI) is an insurance policy which is supposed to kick in to cover the repayments on a loan, mortgage or credit card if the borrower should be faced with an unexpected drop in income. For this reason, it was often sold by banks alongside loans of all kinds, with staff encouraging customers to take out a PPI policy for protection.

But controversy arose after it transpired that many people had been sold policies that were not suited to their needs and who would not be able to claim on them if the situation should arise. Other customers reported pressure selling tactics, being told the PPI was compulsory or even having it added onto the cost of their loan without being told what it was or that they would be paying for it.

After the banks' defeat in a court case against the Financial Services Authority, who had introduced retroactive rules on PPI mis-selling which the banks felt were unfair, millions of customers could be set to reclaim PPI premiums they paid unfairly.

But there are suggestions that it could be months until the banks begin to process PPI complaints, with the potential for payouts to take up to five years to go through. There are reports that banks are taking on extra staff to handle the influx of claims, demonstrating the levels of PPI mis-selling which took place.

If you have been mis-sold a PPI policy, we can help you make a PPI reclaim today.

Claims Financial