| Banks, Financial Regulators, PPI Deadline

PPI

According to FCA (Financial Conduct Authority), ‘there has been an increase in payouts since the month of May.’

The cumulative amount was approximately around £260m. This amount is believed to be the highest amount paid so far to the customers.

As a matter of fact, there are more claims that are likely to be filed in the near future. This will sum up to more than a billion in payouts. Banks have set aside about £40bn for PPI claims.

It has been witnessed that Lloyds and Barclays have increased their provisions by £1bn and £700m respectively. In such situations, banks tend to face a lot of pressure.

They are likely to face additional pressure when FCA launched their advertising campaign. This campaign aims to make people aware regarding the PPI claims and compensation.

This has resulted in more people realising that they have been mis-sold the PPI policy and how they can claim for refund. To make matters worse, the deadline for filing PPI claims is a good two years away which will exert additional pressure once it gets closer.

It is being said that a £42.2m campaign that should ideally be funded by lenders is likely to kick off on 29th of August.

Until now, it has been observed that only one in four cases of PPI claims have been registered and the rest may not have been dealt with in the right way.

According to a reputed FCA official, ‘Approximately, £50bn PPI policies may have been mis-sold.’ Plus, the increasing interest rates can cause the banks to pay a claim amount of £100bn, if at all every eligible person claims for their refund. This figure shows how only 30% victims have so far filed a claim for their compensation.

The problem seems to have just started and there is a long way ahead. The only hurdle that consumers are likely to face is the ticking clock. The deadline may create a pressure on consumers to apply for their refund. If the banks take an initiative to compensate all the victims whom they have mis-sold PPI policies there is a possibility that it would cost them close to £100bn.

With the £42m advertising campaign about to be launched by FCA there is a high possibility that more PPI complaints may be registered and banks will have to face the consequences. There are some important changes which one can expect but it mainly depends on further provisions.

The deadline has triggered individuals to apply for compensation of their mis-sold PPI claims. It has acted as a driving force for people. So, there are chances that as the deadline comes nearer there will be more number of victims applying for refund.

Introducing a deadline has been the best thing to happen to PPI victims as more and more cases are coming into light. The advertising campaign has the potential to guide the consumers in the right direction.

Mainly, they can recover their payments which they unfairly lost via a mis-sold policy being sold to them. There are certain companies which help consumers by guiding them in the process of acquiring their refund by following the right procedure.

Hopefully, victims may gain back their much deserved refund amount.

Links Referred: http://www.cityam.com/269885/great-ppi-claim-game-bank-payouts-nudge-30bn-fca-prepares

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