Did you know that over £34 billion has been paid to thousands of UK customers for mis-sold PPI policies? It’s not known how many policies were mis-sol
Did you know that over £34 billion has been paid to thousands of UK customers for mis-sold PPI policies? It’s not known how many policies were mis-sold to individuals, but it could be millions, meaning even more refunds are due.
The best PPI claims companies are busy working with individuals to process their claims before the deadline. 29th August 2019 is the deadline set by the Financial Conduct Authority (FCA) to encourage people to submit claims, rather than put them off. People have been reclaiming PPI for over a decade, and the banks have suffered from the billions of pounds in compensation.
PPI policies were commonly mis-sold with credit cards, mortgages and loans. Many people were unaware that they even had PPI policies as some banks and lenders added it automatically. In other circumstances, individuals can claim a PPI refund due to high levels of commission on a policy — also known as the “Plevin rule”.
The landscape of PPI claims is rapidly changing, and people don’t have long before the deadline arrives. But, the deadline doesn’t simply affect consumers. Banks, PPI claims companies and the Financial Ombudsman Service will also be affected — for better or worse.
Future of PPI Claims Companies
PPI claims companies may start dwindling the closer it gets to the deadline. Many of them will aim to resolve most PPI cases before the cut-off date — so the closer it gets to the deadline, individuals may find they have less choice of claims companies.
Many firms may choose to process a different type of claim, such as payday loans or flight delays. Payday loans have seen a vast increase recently — so much so that one of the reasons for Wonga’s collapse into administration was an increase in the number of claims.
The market has a lot of potential for claims companies and could be an ideal area to switch to as employees already have the experience to manage and handle claims.
Claims companies have seen many changes within the industry in the past year. In July 2019, the government passed an interim fee cap for all PPI claims companies, meaning the maximum charge on successful claims is 20% + VAT (24% total).
In addition to the fee cap, all claims firms are now regulated by the FCA. The change in regulator means new standards and guidelines for companies to abide by. The new regulations are intended to offer better customer service and make claims companies more transparent to improve consumer trust within the industry.
Impact of the PPI Claims Deadline
Many claims companies and consumer experts have argued that the deadline is unfair. Millions of PPI policies were mis-sold, and the cut-off date means individuals must act soon. The FCA organised a two-year advertising campaign to promote the deadline, featuring Austria-American actor Arnold Schwarzenegger.
If consumers find evidence of mis-sold PPI after the August deadline, they won’t be able to submit a claim and will miss their opportunity. However, after receiving cold-calls and text messages about PPI claims, it’s likely that some customers will welcome the deadline.
The banks, no doubt, are happy about the cut-off date as it allows them to move on from the scandal and stop setting aside money. Lloyds Banking Group has been the biggest offender for mis-sold PPI policies, having spent nearly £20 billion on the scandal and receiving 13,000 PPI claims per week.
The Financial Ombudsman Service (FOS) will also be glad when the deadline arrives. Thousands of people have submitted their claims to the FOS to review — and some cases can take months or even over a year to resolve.
With four months remaining until the deadline, act now if you think you could have been mis-sold a PPI policy. The clock is ticking, and the end of PPI claims is fast-approaching.