If you’re like most people, you probably like to think you can trust your bank to help with your finances. All too often, though, we are seeing stories in the news of banks behaving badly.
One such story you may have read about is the Libor rigging scandal. That was when banks were found to be falsely inflating or deflating their rates so they could profit from trades.
That’s certainly bad enough. But a scandal far worse — both in terms of its scale and the effect it has had on individuals — is that of mis-selling payment protection insurance (PPI). As a result of the widespread mis-spelling that occurred over the course of several decades, many people are looking for? help and advice in claiming back their premiums from mis-sold PPI.?
How This Might Affect You
One of the problems with the whole PPI scandal is that many of its victims aren’t even aware that they are victims. To put it into greater perspective, around 45 million PPI policies were sold between 1990 and 2010. The premiums for those policies were worth around £44 billion ($67 billion) to the banks.
The reason so many people are unaware they were duped is that one of the many ways in which PPI was routinely mis-sold was to tag it on without the customer’s knowledge. People applying for loans or mortgages were presented with the document to sign, unaware that a checkbox indicating that PPI was required had already been ticked.
The payment for the insurance policy was then added to the finance, which the customer paid on monthly basis without knowing about it. Quite often, the interest alone came to more than the actual PPI itself cost.
Why It’s Important To Claim Soon
Since the scandal exploded into mass awareness in April 2011, banks have already paid out around £25 billion ($38 billion) in refunds and compensation. Not surprisingly, they are keen to introduce a deadline for which claims can be made, which has so far been rejected.
The rejections are looking more and more tenuous as time goes on, though. George Osborne, the UK’s chancellor, recently ousted the head man of financial regulator the Financial Conduct Authority (FCA). It’s widely known that Mr. Osborne is keen to “draw a line” under the whole PPI mess. Ousting the regulator’s chief was the first step in
opening the door to a change of policy there.
While a deadline hasn’t been introduced yet, it’s really only a matter of time before it is.
Double Check Your Finance Agreements
As you read earlier, PPI was often tagged on without the customer’s knowledge or agreement. For this reason alone, you must double-check your finances. If you find PPI that you weren’t previously aware of, there’s a good chance it was mis-sold.
While it’s impossible to say how much money you are entitled to get back, it’s worth keeping in mind that the average payout is around £2,750 (£4,200). If you have more than one policy that was mis-sold, you can claim on each one.
While not so common, there have been several refunds that have been in the tens of thousands of pounds. So get your paperwork out soon and start double-checking.
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