mis sold PPI Claims – The Banks Multi Billion Recurring Nightmare
First of all what is PPI ?
PPI stands for Payment Protection Insurance and is a form of insurance which covers loan repayments for a maximum of one year if a person is unable to work because of sickness or unemployment and therefore if sold ethically PPIis a sensible product to consider, when you are taking out a loan, as long as you are being made aware of all the facts so that it can become part of your concious decision making process.
If you have a PPI policy attached to a loan, it doesn't necessarily mean that it was mis-sold to you. But when you took out the loan and who you took the loan out with should immediately indicate whether you have a good case to start a mis sold PPI Claim or not.
So how did being able to make a mis sold PPI Claim come about in the first place.
On the 20th April 2011 The British Bankers Association (BBA) lost a High Court judicial review against FSA guidance on PPI mis-selling complaints.
The FSA ( Financial Services Authority ) is the government appointed regulator for all financial products and services and how these services are provided and managed.
The legal challenge to FSA guidance was launched by the BBA in October 2010. Since that date the banking ombudsman recorded receiving up to 5,000 PPI related complaints per week from consumers. This meant that up until the High Court review the onbudsman had received over 200,000 complaints from consumers about mis-sold PPI policies – upholding 3 out of 4 cases in favour of consumers.
Recent estimates indicate that the banks are in for for total mis sold PPI Claim payouts close to 9 billion, although the general consensus is that this could very easily go over in to the double figures before 2012 is out.
The FSA, due to blatent dragging of feet policy by the banks and other lenders, has recently demanded that banks, insurers and brokers write to 12million customers who have yet to make a PPI Claim, advising them that they may be due a payout.
A simple calculation assuming that six in every ten people respond to the mailshot and are successful will take the expected total PPI Claim compensation bill to £14 billion.
This would have a catastrophic effect with regards to the banking industries provisions for the mis-sold PPI Claim scandal, and leave them in the unenvieable situation to have to revisit yet again their individual financial models in terms of how they plan to compensate customers who are clearly elidgable to make a mis sold PPI Claim
This is undoubtedly one of the worst misselling scandals in the history of banking and financial services sector and one that’s going to cost them dearly.
So what will indicate whether your are well positioned to start a Mis sold PPI Claim ?
Some examples of what constitutes a mis sold PPI Claim
The lender presented PPI Insurance as a mandatory requirement when completing you loan or credit application
You were sold PPI when you had no income to protect such as you were self employed, retired or unemployed making you ineligible for the insurance cover in the first place
Your bank or other type of lender such as a credit card or building society built the cost of a PPI Policy into your loan repayments without your knowledge and therefore technically without your consent.
When your loan with PPI was taken out is also a good indicator as to wether you are probably elidgable to make a mis sold PPI Claim. One of the problems is that banks/lenders do not indefinitely keep your old paperwork on file. When the bank/lender became compliant will also have an effect as to wether you are well positioned to start the mis sold PPI Claim process .
A good guideline to ensure the ideal mis sold PPI Claim conditions are loans taken out with PPI between Dec 30 2001 and November 30 2008
Statistics show that currently the average mis sold PPI Claim payout is around the £3,000.00 mark so, for those of you considering making a PPI Claim, it’s well worth the effort.
But How Much Effort is involved in making a mis sold PPI Claim ?
There are two ways you can initiate a mis sold PPI Claim.
The first is liasing with your bank or lender directly and the second is appointing an MOJ ( Ministry Of Justice ) regulated claims management company to deal with the PPI Claim on your behalf.
Dealing directly with the bank will take up more of your personal effort because you will be effectively managing your PPI Claim and looking out for you best interests.
Appointing a regulated claims management company, makes the whole process much more relaxed. The only effort for you is filling out the simple form appointing them to act on your behalf. As you would expect banks ideally prefer a negotiated settlement. A claims management company will look to claim back absolutely every penny you are legally entitled to plus interest.
Because they are regulated companies there are no up front fees to initiate your mis sold PPI Claim and they operate on a no win no fee basis, which in short means that they are in exactly the same position as you – NO Win No Money.
Is It Worth Starting A Claim?
Yes because the high court ruling that banks and other lenders must adhere to the FSA guidelines of selling PPI Insurance now means that thousands of PPI Claims will be processed and compensation paid to the victims.
You could be receiving thousands of pounds in compensation if your PPI policy was mis-sold to you.