| PPI Deadline

The biggest financial scandal, the Payment Protection insurance (PPI) scandal is said to have cost the UK’s largest high street banks about £34bn. However, to put an end on this on-going issue, the Financial Conduct Authority (FCA) has imposed a deadline of August 29, 2019. The deadline was imposed so that people who were mis-sold the PPI policy could make a claim as soon as possible.

Before the FCA announced the deadline, they made all the banks mail about 1.2 million customers whose claims were turned down. The FCA believes that the imposition of a deadline would put an end to the country’s costliest consumer mis-selling till date. Paying out the huge compensation amount has definitely drained the banks.

The PPI policy is sold to people as a way to recover repayments on loans, credit cards or mortgages in case of sickness, unemployment or death. The mis-selling of the PPI policy initiated from the 1990s once the banks realised the profits they could earn from mis-selling it to their customers.

As people started to realise about the PPI mis-selling scam, more and more people arose to make complaints and ask for refunds from their banks. The number of complainants grew to such an extent that there came a need to make an official investigation regarding this matter.

Moreover, even after the mis-selling scandal was out in open and being investigated by two competition authorities and the financial regulator, the product was not banned. However, there were various restrictions implemented in the year 2010. The number of complaints for mis-selling PPI has surpassed the 20 million mark and the banks are said to have paid out £26bn and more to the victims.

Now that the FCA has imposed an official deadline, complaints regarding the mis-selling of PPI policy are bound to increase. Because of the deadline, the scandal is assumed to be near its end, giving banks in the country much needed relief.

For encouraging the people of the country to make a claim, the FCA has invested millions in the advertising campaign. This advertising campaign (effective from the last month) is said to urge people to make a claim or lose their money altogether.

Ever since the deadline was announced, the FCA has observed a deadly increase in the amount of complaints. The FCA further believes that this being just the start, the number of complaints is bound to increase as the deadline nears.

However, the PPI policy is not banned, it is still sold and there are 2 million live policies. The FCA claims that people with the current PPI policy can make a claim after the deadline expires (if they have a future mis-selling claim).

The PPI polices that would be sold after the end of August 2017, will not be subject to the deadline imposed by the FCA.

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