The recent PPI scandal is still costing banks millions of pounds every month. To this day, more than £19 billion has been paid out in compensation across the whole industry; almost £400 million compensation was paid during the month of March 2015 alone, according to recent figures from the FCA.
Despite the industry having grown massively, there are still many borrowers in the UK who don’t know too much about the recent scandal. For those people, this is the concise guide to PPI claims.
A Brief History of PPI
The average consumer isn’t very educated on the topic of payment protection insurance (PPI) and believe that the policy has only existed for a few years. PPI has, in fact, existed for more than two decades. The first PPI case was made in 1992-93; the borrower won the case, but a 10-year non-disclosure clause was included. After ten years, the financial authorities were able to take action.
The PPI claims industry has experienced huge growth ever since the first case in 1992-93, millions of people are now receiving compensation for mis-sold policies. It doesn’t look as if the number of claims is slowing down anytime soon either.
Here’s Why PPI Isn’t a Good Policy
PPI isn’t a good policy for a number of reasons; you might have heard from your bank/lender that having a PPI policy will protect you and provide cover for your debts when you are unable to make payments, however, it’s not as simple as that.
Payment protection insurance can provide cover for you in the instance that you can’t work because of an illness or unemployment. The policy can be added to several financial products such as credit cards, mortgages, and loans.
What the lenders probably won’t tell you though, is that the standard policy won’t protect you if you’re self-employed (which is the case with approximately 15% of the UK workforce), work part-time, or have a fixed-term contract. A policy will only cover you for 12 months and it’s usually only the minimum monthly payment amount that is covered.
Lastly, mis-selling is another reason why PPI isn’t a good policy. Banks and other lenders have wrongly sold policies to consumers that don’t need this type of cover or simply don’t want to have it.
Not Sure How to Make a Claim?
A large amount of borrowers in the UK know that they have been mis-sold a PPI policy, but aren’t quite sure how they can reclaim the amount that they are rightfully owed by their lender. There is always the option to research and make a claim yourself, but this can be confusing and very time-consuming.
The best option is to go through a claims company, who will handle your claim from start to finish and ensure that you have received a fair amount of compensation. These companies will be able to check your eligibilty, find policies that you might have forgotten about, write a claim letter which can be sent to your lender, and take care of every other aspect relating to your PPI claim.