Category Archives: PPI

How the Banks got into the PPI Mis-selling mess

Anyone would think that an industry as heavily regulated as the consumer finance market would not be prone to scandals as widespread as the payment protecting insurance (PPI) saga, but where there’s money there’s always greed. The truth is that lenders saw a sneaky and underhand way of getting their customer to part with more money than they needed to, and for many years this went largely unnoticed by the powers that be. However, suspicious customers eventually took action, and once an investigation was undertaken the bubble burst.

  • How did they do it?

The answer to the question is: very easily, and by taking advantage of consumer’s lack of understanding of financial products. When granting someone a mortgage or loan all they needed to do was get them to believe that, in the first instance, they needed a PPI policy and, the cherry on the cake, that they had to take the policy provided by the lender. This happened on a widespread basis, and led to many people erroneously taking out a more expensive PPI policy than was needed. In other cases, customers were sold policies that were of no use to them or were no told they were even being sold a PPI package.

  • Who Can Claim?

Anyone who has had a PPI policy in the past few years can use a PPI calculator and claim back the fees if it is deemed to have been mis-sold to them. Many thousands of people have already claimed, yet it is believed that only 10% of those who have ever held a PPI policy have so far made a claim to get back the mis-sold fees. It is telling that the collective lenders – of which some 20-odd were involved – have collectively set aside over £14bn to finance repayments, and this figure is almost certain to increase in time.

  • What Happens Next?

Assuming the banks honour the High Court instruction to pay back mis-sold PPI fees – and there have been fines levied on some that took too much time to do so – the coast is clear for claimants to get back what they are owed with relative ease. However, for many the prospect of handling such a procedure alone is too daunting, and this is why using the expertise available from a PPI Claims Company may be a wise choice. However you claim, the fact is you are entitled to your mis sold fees, as well as compensation.