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Feb

21

PPI Claims Bill Tops £13billion

Posted by : admin | On : February 21, 2013

Category: Banking

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Payment Protection Insurance (PPI) is an insurance, which can be attached to loans, mortgages and the like and ensures that if you cannot work for some reason, or if you are made redundant, then your repayments are still made. However, many PPI policies have been mis-sold resulting in individuals paying for PPI when they cannot actually claim on the insurance or feeling pressured into purchasing it unnecessarily.

The PPI scandal has occurred because individuals were sold PPI when they would have been financially better off without it. In 2005 the FSA put PPI review as a top priority and after conducting research found out the there were poor selling techniques in practice. In 2006 firms began to be fined for mis-selling PPI, there were constant debates surrounding the control of PPI and in 2011 there was a high court case that ruled against the banks thus resulting in thousands of PPI claims being re-opened. It has introduced new regulations in the dealings of complaints, meaning that consumers are treated fairly. This has resulted in an enormous amount of PPI complaints being made.

Banks are setting aside billions of pounds each to prepare for the compensation costs they will have to pay out, and this number is believed to exponentially increase given the 2011 ruling. Many banks will not know the final cost of the PPI scandal until next year, until then they are sectioning sums of money to be dedicated towards compensation.  It is estimated that between 2000 and 2012 there were 604,550 PPI claims made, and approximately 62 per cent of this are being upheld in the consumers favour. With such a large number of PPI claims, it is not surprising that banks are seeing their compensation bills increase dramatically.

The PPI scandal is set to top £13 billion in compensation for those mis-sold PPI and is therefore becoming the worst financial scandal in British history, topping the pension mis-selling scandal by approximately £2 billion. There are concerns that due to the huge compensation bill, the banks will run out of money in their compensation pots.

For advice and assistance with reclaiming mis sold ppi, contact the PPI Claims Specialists at www.PPIClaimsCo.co.

Mar

29

Complaints Against Banks Up by 21pc

Posted by : admin | On : March 29, 2012

Category: Personal Finance

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The number of complaints against UK banks and financial institutions, have increase by 21% as compared with the previous six months according to the Financial Services Authority (FSA) which received more than 12,000 complaints a day in the second half of 2011, a large proportion of which were related to mis sold payment protection insurance or PPI.

According to figures released by the FSA, complaints about mis sold PPI rose by 85% to just under a million, in the same period.

What is Payment Protection Insurance

Payment protection insurance, also known as PPI is a type of insurance cover that is supposed to cover borrowers’ loan/creditcard repayments if they fall ill or lose their jobs and are unable to make their contractual monthly repayments.

But industrialized mis-selling of the insurance product, which generated an estimated £4billion per year in profits for the banks, became common practice and many who did not want it, need it or were eligible for it were convinced to purchase it.

The banks are now being flooded with PPI claims for compensation and have agreed a compensation bill, which could cost them over £10billion over the coming years. The FSA to has now granted them  more than the usual eight week limit to deal with the backlog of historic PPI complaints cases.

Claiming Back PPI

The FSA figures also suggest that four out of five PPI complaints are coming via PPI Claims Companies who are actively advertising on the television and in the newspapers, in order to raise awareness and encourage borrowers to reclaim their money.

The number of claims settled in favour of the borrower, also increased in the second half of the year, with £2.1billion being paid out to customers who had been mis sold PPI.

Richard Lloyd, chief executive of the consumer group Which?, said: “The complaints data is evidence that some banks are still failing to treat their customers fairly when things go wrong… The increase in PPI complaints further demonstrates just how widespread PPI mis-selling was. We now need to see the banks take action and deal with these complaints quickly and efficiently and the FSA must take action against anyone dragging their feet settling complaints.”