The Banks that Mis-sold PPI
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by: BTLewis
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Word Count: 516
Date: Fri, 3 Feb 2012 Time: 2:51 AM
While banks made it very difficult for PPI claimants to seek refunds for mis-sold PPI policies, it appears much has changed since the High Court ruling in April 2011, which dictated that banks could no longer avoid paying back money to hard done by customers with justified PPI complaints.
The ruling recognised that aggrieved customers had suffered for long enough, and it was unreasonable and unfair for banks to postpone or deny rightful complaints. The High Court even made banks look at previous PPI claims to rectify earlier cases in which their dubious decisions left already angered customers at a loss before the ruling came into play.
Payment Protection Insurance is a form of cover recommended by banks to help borrowers who had taken out a loan, mortgage or credit card with a financial service provider in case they were affected by illness or lost their job due to unforeseen circumstances and who consequently were unable to meet their payments.
Unfortunately, many people found that when it came time for them to claim on the PPI policy, they were denied this help because they did not qualify for it (?!) due to absurd reasons, such as:
• they were too old for the policy to be applicable to them
• they were self-employed
• they had a medical history that made them ineligible to receive cover
Murmurs of discontent regarding these PPI policies have been increasing in volume for over a decade, these eventually led to the stone-cold realisation that a hugely disproportionate amount of people were being turned down for help in the same way - because the banks who recommended the policy to them were refusing to allow customers to make use of it at the time they needed it most.
After many complaints and consumer watchdog investigations, PPI mis-selling was eventually found out to be a huge scam, of which many name-brand high street banks were guilty.
Fighting claimants off vehemently, banks eventually had a change of tact, and many (HSBC, Lloyds TSB, Nationwide etc) are doing their part to regain trust in their customers by setting aside huge provisions (in the billions of pounds department) to ready themselves for the flood of expected PPI complaints (of which there will be millions).
Barclays PPI policies have faced a wave of complaints which are still being dealt with and as a gesture of good will more than an "admission of liability", they have set aside a £1 billion fund to compensate their customers who had been mis-sold PPI, with plenty of other banks following suit and setting aside huge amounts of money to ready themselves for the flood of complaints.
It looks like they'll be busy for a good while yet.
About the Author
Bryan Lewis has been following the PPI scandal for some time, writing for one of the UK's leading claims management companies.
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