Finance

Banks Agree to Consumer Group’s PPI Claims Proposal

The new agreement between banks, PPI providers and the consumer group Which? is estimated to cut down the number of mis sold customers in PPI into an insignificant value by the end of the year. Banks and PPI providers have agreed to let customers claim straight to them. The Financial Services Authority (FSA) also called upon banks to correspond with customers potentially mis sold PPI. To date, 10.8 million UK citizens have not yet made a claim for PPI.

The PPI claims process was not fully established during the time the mis selling was discovered. Almost every customer who complained or claimed that they were mis sold PPI had their claims rejected by most banks. The FSA decided to establish new claims guidelines in 2010. This was legally challenged by banks. However, due to court favor leaning towards the FSA, the banks dropped their challenge. The FSA secured a £3.2 billion (today £5 billion) compensation package for the entire United Kingdom.

PPI requires customers to purchase the insurance, and remain for a span of time, in perfect health and employment status. Before they can purchase the insurance policy, they should be given a medical and employment check. Customers who weren’t given one have a good chance of getting back all their repayments. Many unemployed, self-employed, retired and having medical issues were sold PPI by their financial advisers using abusive sales methods.

Experts still consider the new proposal as sketchy. Banks are known to evade certain details and might provide customers with only an equivalent of a lump sum repayment. Experts state that to have all the legalities and technicalities involved in the claim considered, it is wise that they consider consulting with claims specialists. They state that many factors are involved to get back all the repayments, and banks do not have the patience to consider all factors for every customer.

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