Today, banks are stepping forward, admitting to potentially mis-selling payment protection insurance (PPI) to consumers, and offering to provide financial compensation for such claims. By many estimates, PPI costs the financial institutions as much as £300 a month. For those individuals who may have been a victim mis-sold PPI policies, it’s important to seek out the financial compensation owed to you. You cannot just wait for it to arrive, but rather must file a claim.
Which Banks Are Issuing PPI Claims Compensation?
Thus far, a number of larger and small lenders are providing assurances and compensation for PPI mis-selling claims. This includes Lloyds, Barclays, HSBC, Royal Bank of Scotland, and Santander – some of the largest in the area. Many of these companies have put aside hundreds of millions of pounds for such claims. Some reports indicate expectations of more than £30 billion in payouts over time. In many ways, these claims have historic significance in terms of potential reimbursements.
Though PPI has been around for some time, it hasn’t been well known in terms of the mis-sold claims until more recently. New claims are coming in, due in part to additional publicity on the risks and negligence in selling these policies. However, there are limits on when individuals can file claims. The Financial Conduct Authority has introduced a deadline of August of 2019 as a time when individuals must file their PPI claims if they hope to obtain compensation. When all is said and done, claims may reach as much as £50 billion.
What Is the Underlying Problem Here?
When it comes to understanding the risk in PPI policies, consumers must take the time to understand how they work. These policies were designed to provide financial compensation to borrowers for instances in which they couldn’t make their loan repayments due to illnesses, injuries, or job loss. Terms for them differed from one organisation to the next, but what makes these plans so worrisome is that many lenders and their brokers persuaded or mis-led consumers into taking them, whether or not they made sense for individual borrowers or offered any real benefit.
After years of sales, regulators have found many lenders sold these policies to those who didn’t need them. The Financial Conduct Authority claims that as many as 64 million policies were issued to about 30 million consumers between 1990 and 2010, many of which were sold in a less-than-desirable manner. In 2011, lenders lost a court ruling, and this is where many of these claims arise. It’s important to note that when the initial court filings occurred, it was thought these claims would top £4.5 billion. Obviously, the claims have surpassed that amount significantly. Thus, the filing date was put in place to stem a continuous flow of such claims.
Little doubt exists that those who took out such policies didn’t recognise their opportunities and limitations. More so, claims of mis-sold policies continue to become evident as more people learn about them and realise they have them, with some borrowers having no prior knowledge of the sale at all. Funds set aside by the big lenders can help to cushion the blow to consumers who need to recoup some of their lost funds.