| Banks, PPI, PPI Deadline

Banks Can't Wait For The PPI Deadline

The issue of mis-sold PPI is now several years old. When the policy was introduced, it was perceived as a very helpful tool of securing the buyer’s financial future.

It would cover them in the cases of them losing their jobs, meeting an accident, encountering a sudden illness or any unforeseen circumstance, which would cause them to shell out money. Payment Protection Insurance would make sure that the buyers are never out of money during various emergencies. While the announcement of this new product was greeted with cautious optimism, it did not take much time for the product to turn into a nightmare to many customers.

In no time, PPI started to turn into a tool of financial manipulation. As it was generally sold along with loans and credit, lenders across the country started mis-selling the policy.

Buyers were often secretly sold the policy along with the loans and credit sanctioned to them. There were also lenders who would not fully explain the policy to the buyers while making the sale. Only the rosy picture was highlighted and the expense details were purposefully kept hidden – especially the payment of commission. The lenders earned decent commission from the policies without the buyers even knowing about the same. This carried on for a sufficient period of time, and then finally the scam was exposed. People gradually started realising that they were wrongly sold the policy and commission was taken without their knowledge.

They started claiming their money back from the lenders and the banks concerned.

This amount kept on increasing exponentially over the years. The banks are having such a hard time dealing with the compensation that they had to resort to further manipulative ways to save money, such as pulling back a portion of compensation.

They resorted to asking the customers to give back a part of the claim, saying that calculation errors were made by their over-worked claims department. All of the big faces, be it Lloyds, Barclays or HSBC, started setting aside billions specially to cater to the PPI compensation.

Till date, banks have paid out huge amounts of money for the purpose of PPI compensation. Overall, the amount goes beyond £40.2 billion. Recently, Barclays reported to set aside extra £600 million as PPI provision. Also, Lloyds Banking group has claimed to have set aside a total of £17 billion for the same.

As the complaints are still increasing every passing month, the banks are still expecting to shell out more funds to meet the needs of the mis-sold buyers.

Finally, the Financial Conduct Authority (FCA) declared a deadline for making claims to the lenders, to August 2019. It was declared that after this date, no claims would be entertained by any authority and the buyers would not be able to claim PPI refund anymore.

This news may have shocked the public, but have certainly relieved the banks. They see it as an end to their years of suffering (brought about entirely due to their own manipulations) and spending billions behind these claims. Though it may increase the current flow of claims and complaints, banks can’t wait for the PPI deadline, to put this nightmare behind them.

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