by Mark Johnston
Banks Want a PPI Deadline.
Figures show that Mis-selling payment protection insurance (PPI) claims have exploded in the last few years following a legal battle which eventually concluded with banks being ordered to repay premiums in a high number of cases.
The Financial Ombudsman Service, recently said it is now receiving 5,000 claims a week and has estimated total claims will be 52 per cent higher than expected this financial year.
“It is extraordinary that we’ve received over 500,000 complaints about payment protection insurance and despite these record numbers, this mis-selling scandal shows no sign of slowing,” said chief ombudsman, Natalie Ceeney.
It is also estimated by leading analysts that only about half the total payment protection insurance (PPI) liability that banks face has actually been claimed.
Despite these figures it seem that the British Bankers Association (BBA) is keen to draw a curtain over the whole thing and so they are trying to push the Financial Services Authority (FSA) to impose a time limit for claims to be lodged, with a deadline in the summer of 2014.
If a deadline is imposed, the Britsih Banker Association (BBA) said the banks would fund a year long advertising campaign to make consumers aware of the change.
This news of a possible dealine has sparked fears amongst some consumers that the deadline would allow banks to escape repaying many victims of the widespread mis-selling.
The Financial Services Authority (FSA) has recently confirmed that it is in initial discussions with the banks about a time limit for claims but they also added that no changes to any of the existing rules would take place without a full public consultation.
A spokesperson for the Financial Services Authority (FSA) says: “As you would expect for an issue of this scale and complexity, we have considered a number of options and continue to do so”.
Martin Lewis, the founder of MoneySavingExpert.com, stated that “this money was wrongly taken from people, due to systemic selling and on some occasions, downright deceit and it went on for over a decade. People should have at least as long as that to get their money back.”
Peter Vicary-Smith, chief executive of Which?, said: ‘It is in everyone’s interest to draw a line under this scandal” however he also added that “time limit cut offs already exist for payment protection insurance claims”.
Although, some industry experts feel that this news acts as a silent warning for anyone thinking of reclaiming their payment protection insurance (PPI) to do it now, just in case.
However all may not be lost for consumers as it appears that these particular plans will be further hampered by the fact banks have just started sending out letters to house holders identified as being possibly at risk of mis-selling, in which a three year deadline is offered to mis-selling victims. Millions more will be sent out in the first half of this year any change to this deadline would therefore cause widespread confusion.
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