by Mark Johnston
Is this the end of PPI claims?
Payment Protection Insurance (PPI) policies were sold in their millions alongside mortgages, loans and credit cards, with many consumers not knowing they were paying for the cover or not being eligible for it.
These particular policies were designed to protect borrowers in the event of sickness or unemployment.
Payment Protection Insurance (PPI) has become the costliest of Britain’s financial mis-selling scandals.
Estimates suggest that banks currently face a compensation bill of £13 billion, with the total bill expected to top £20 billion.
Research has revealed that the cost of the Payment Protection Insurance (PPI) mis-selling scandal is now more than double that of the Olympic Games.
Consumer group Which? claimed a ‘staggering’ £18.4 billion has now been set aside across the industry to tackle the ongoing surge in Payment Protection Insurance (PPI) complaints, eclipsing the £8.9 billion cost of the Olympics.
As public awareness has grown around the mis-selling scandal, banks have been deluged with complaints and compensation claims.
In the first three months of this year the Financial Ombudsman Service (FOS) received 133,000 payment Protection Insurance (PPI) complaints.
It therefore appears that Payment Protection Insurance (PPI) is the most complained about financial product that the financial ombudsman has ever seen.
Four of Britain’s big banking groups – Lloyds, Barclays, HSBC and Royal Bank of Scotland (RBS) – accounted for almost two-thirds of all complaints received by the ombudsman
The Financial Ombudsman Service (FOS) resolves disputes when customers are unable to come to an agreement with their bank.
Back in June this year banks had hoped to agree a deadline for Payment Protection Insurance (PPI) compensation.
However, the talks ended recently without an agreement, meaning lenders potentially face several more years of handling these claims.
However it now seems that complaints about payment protection insurance (PPI) may be levelling off and possibly even falling.
According to the Financial Ombudsman Service (FOS) the daily inflows of new complaints now tally 2,000, down from a high last December when they regularly reached 3,000.
This new data could possibly be explained by the fact that banks, responding to steers from the Financial Conduct Authority, the regulator, are settling more claims directly with customers rather than allowing the disputes to progress to the Financial Ombudsman Services (FOS).
Though, Natalie Ceeney, Chief Financial Ombudsman said “levels remain very high”.
However, according to figures from Britain’s financial regulator, around 50 million Payment Protection Insurance (PPI) policies were originally sold and so far only around 15 percent of people who had the policies have claimed for compensation meaning that millions of customers could still stake compensation claims.
In conclusion the fact it banking customers did not create this environment of miss trust, some experts feel that they are just trying to survive with in the construct unethical banks have built around them.
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