It’s over 10 years since the PPI (Payment Protection Insurance) mis-selling scandal reared its ugly head, and yet it’s thought that the banks are only half-way there when it comes to fully compensating their customers.
It’s rumoured that the Government is keen to draw a line under it all, and The Financial Conduct Authority (FCA) is in the process of consulting on whether or not to introduce a cut-off date for making a PPI claim. We’re expecting the results of this consultation any time now. If it is passed, then the rule will immediately come into force, which will likely mean you will have only two years to make a claim. So be on your guard.
Should I make a claim?
If you have had a mortgage, credit card, store card, or loan agreement in the past, take a look at any paperwork you still have. If you see a mention of the words Payment cover, Protection plan, Loan protection, ASU or Loan care, then you may have been mis-sold PPI.
According to the Money Advice Service, over 85% of people who have claimed PPI compensation have been successful, and the average customer payout is around £3,000. So if you’re in any doubt whether or not to make a claim, remember that thousands of people are finding they are due a large amount of compensation, and many of those people had no idea they had PPI in the first place.
In some cases, people have received a lot more compensation than they actually paid for the PPI. This is because the banks are expected to pay back the amount paid in premiums, plus any interest paid on those premiums (especially applicable on loans, and credit cards where customers did not pay their balance in full each month). The banks are then expected to pay interest on the total amount at 8 per cent a year from the start date of the policy. So if you were mis-sold PPI ten years ago, that will really start to add up.
How do I make a claim?
It’s much easier than you think to make a claim, which is why it’s always worth a shot. And you certainly don’t need to use a claims company to do it for you. There are lots of independent websites offering step-by-step guides on how to claim, including templates you can use when contacting your bank. Here are two we particularly like:
Michael Ward, Managing Director of PayingTooMuch.com said “You should always be on your guard when taking out any financial policy. Be vigilant when it comes to any add-ons, and always challenge anything you’re unsure of. Although we do a lot of our business online, our customer service advisers are always on hand if you are unsure of anything during the application process.”