| PPI Refund

PPI form

It seems like we have been hearing about the PPI scam forever. For over more than a decade, the refund claims have been pouring in by the millions from mis-sold buyers all across the UK. Every day, more and more people are realising that they were mis-sold the policy. The number of claims made was in decent figures when the scam was first exposed, but has risen exponentially as the years have passed. As unbelievable as it may sound, the complaints for PPI refund are still increasing on a weekly basis despite the fact that it has been several years since the scandal first came into light! This is enough to reveal the extent up to which people were affected by what is now considered the biggest mis-selling scandal to ever hit the banking industry in the UK. The scam also had severe repercussions for the lending banks, most of which comprise of A list names such as Barclays, HSBC and many more. The banks had no option but to take care of every single complaint which came their way and make sure that all the victims were compensated.

Years ago when there was a time of cut-throat financial competition and products like personal loans were not producing the profits required to keep the shareholders happy, the banks found a way of generating more profits, which ultimately gave rise to the historic PPI mis-selling scandal.

Relief For Lending Banks

However, after years of struggle on both the trading ends, there is news of relief for at least one of them. The Financial Conduct Authority (FCA) has made an official announcement that the claims for mis-sold PPI will now have an expiry date. The date of August 29, 2019 came in like a drop of Manna from heaven for commercial banks all across the UK involved in PPI mis-selling. FCA declared that the complaints regarding PPI claims will only be entertained by the financial organisations till the 29th of August, 2019 deadline.

This means that if you happen to discover that you were mis-sold a PPI policy  after this date, you would never be able to claim compensation for the same. This may have come as a shock to many consumer welfare outfits who were responsible in getting the whole PPI fiasco into the limelight, but it brought a huge wave of relief to all the banks that were primary antoganists in the PPI story.

Deadline Only for Filing Claims

It is not that the FCA is making any less effort to make sure that the victims are compensated. It has launched a campaign aimed towards increasing awareness encouraging everyone who feels they may have been mis-sold PPI to check the same and report to the authority as soon as possible. With the deadline two years down the line, the FCA aims at persuading more and more people to make checks and file their complaints to the concerned lender. Owing to the time it takes by the financial institutions to process the complaint and look into the matter, the deadline set by the FCA is only for filing the complaints.

PPI-A Flawed Product To Begin With

In spite of such facilities given by the FCA, claiming PPI refund is not so easy. Even after you realise that you have been mis-sold, you may have to go through a lot of trouble to justify your case. The reason behind this is the strong manipulative nature of the lenders. The policy itself was structured and sold in a way that made it difficult for anyone to claim compensation. It was an expensive policy which provided a comparatively poor cover, but was marketed and sold as if it was the best policy in the world! This is why PPI sounded like a good idea to thousands of people and they bought the policy from the lenders. However, this was still not enough to satiate the pockets of certain financial institutions. They sold the policy to majority of the customers, and sold it indirectly to the remaining ones. This section of the customers is facing the real challenge of claiming the refund, no matter how much they are encouraged to claim before the deadline. This is precisely what is relieving the banks as the number of PPI cases will considerably reduce in a couple of years.

PPI Deadline Means That The Bleeding Can Finally Stop For Leading Banks

If you look at it from a bankers’ perspective, it is fair enough for them to be relieved that the whole fiasco will finally be put to bed. Over the years, banks have set aside millions of pounds just to cater to the PPI claims of the customers. Barclays have claimed to have set aside £9.1 billion in total for PPI. Lloyds have put aside more than £18.1 billion. There are many such banks which have been setting aside more and more funds for compensation claims on mis-sold PPI policies. No matter what, a commercial bank has several functions to perform apart from paying back PPI claims. If they are doing it all in a single go, they are bound to face difficulties in handling all the operations.

Ever since the PPI mis-selling scandal has come into light, several banks have not been able to focus on other important matters apart from PPI. This has also resulted in reduction of the brand value of the concerned banks. Unfolding of the scandal has resulted in people losing their faith in the commercial banks they have been dealing with.

When the scam first came into light, people also started blaming the banks that were nowhere related to the scam. This implies that the culprit banks lost a huge chunk of their customers. Along with the already increasing pressure of setting aside a PPI provision, customers also started withdrawing their deposits from the banks. The commercial banks were in a terrible state when the scam was exposed. Some were in so much trouble that they had no option but to ask a portion of the compensation back. If this demand was valid or a hoax is still an issue, but several banks asked their customers to return a portion of their compensation back to them due to certain issues in the calculation of their exact compensation amount. As the exact compensation amount is difficult to ascertain, the customers were often not able to argue effectively with their banks to claim their money back. Though this may be construed as fraudulent activity, but it may also be seen as a way of saving as much money as a bank can to provide for various other purposes.

There is no way you can feel any sympathy for the banks seeing as they brought this situation onto themselves. The bankers are saving their money and are happy as the FCA announced an end for the PPI complaints, but the customers may not be able to claim their money once the deadline is reached. Whatever the case is, all that was needed by both the parties was to stay aware and updated about what they were heading into!

Check now for FREE
Share this post: