Payment protection insurance (PPI) is sold alongside credit cards, mortgages and loans. The insurance covers somebody if they are suddenly unable to pay for one of these products — for example, if they lose their job or become ill. In the right circumstances, PPI is an excellent product.
However, two decades ago, many banks realised that selling PPI was a great way to make a profit. The banks encouraged and, in some cases, pressured staff to sell PPI with products. In the worst cases, some customers didn’t even know they were sold PPI.
The PPI misselling scandal is one of the biggest of its kind the UK has ever seen. The insurance was sold to thousands of people in the UK and, since the scandal came to light, people have been claiming back their money. The banks have paid out billions of pounds for compensation, legal fees and fines, putting a tremendous strain on them over the past 10 years.
This, along with the issue of the Financial Ombudsman (FOS) suffering from a backlog of PPI complaints, has led to the Financial Conduct Authority (FCA) announcing a PPI claims deadline. All claims against mis-sold PPI must be made by 29th August 2019.
Why is There a PPI Deadline?
The ongoing and increasing strain on the Financial Ombudsman is a key part of the introduction of a PPI claims deadline. The FOS is receiving over 1,000 complaints a day and already has a huge backlog of PPI cases to handle. If you have to refer your case to the Ombudsman, it could take up to two years for the FOS to reach your case and attempt to resolve it.
The PPI deadline will gradually ease the pressure on the FOS, which has employed staff specifically to work on PPI claims. It will also ease pressure on the banks, which have put aside millions of pounds each year for the sole purpose of handling PPI claims and giving customers the money they are owed.
But, is the PPI deadline a good thing? Consumer’s association Which? argues that creating a deadline means the process for making a claim needs to be simpler and easier, suggesting being able to make a claim online should be introduced to streamline the process.
How to Make a PPI Claim Against Your Bank
Making a PPI claim against your bank is actually very simple once you are working in cooperation with the bank at fault. The issue is that not all of the banks are forthcoming with contacting customers. Some websites are far from customer-friendly and it may take a while to find the information that you need to make a claim.
For this reason, many customers choose to work with a reputable PPI claims company. PPI claims take a number of months and allowing a claims management company to make a claim on your behalf can save you time. The process will still take a number of months, but a claims management company will handle all communication, saving you the stress of negotiating alone with a bank. Always read the terms and conditions before working with a claims management company and look for a company that offers a low service fee and no win, no fee PPI claims.
Will the Deadline Affect my Claim?
The deadline is likely to cause an influx of people making PPI claims. When the deadline was discussed last year there was a rise in complaints. As long as you start the process now, though, you are unlikely to be affected by the deadline. The process usually takes up to four months, but it could take longer if more people are making claims.
Although August 2019 seems like a long way away, you should not put off making a PPI claim — or at least checking if you’re eligible to make a PPI claim — any longer. Put it at the top of your to-do list so you don’t get caught out miss out on receiving the money you deserve.