Phenomenal Rise in PPI Pay-outs

Our Financial Services Authority (FSA) has been working hard to bring in tough regulations reduce the number of people who are mis-sold payment protection insurance. Where there are cases of mis-selling in previous years, the FSA is constantly monitoring the process of repaying customers and issuing compensation performed by the major lenders and insurance providers in the UK market. The FSA has published data that was collected from the firms, which were responsible for 92% of the overall complaints about the mis-selling of PPI in 2011 and 96% of firms that have so far been complained about in 2012.

Astronomical Rise in Pay Outs

In January of 2011, there was less than £37m pounds in compensation paid to consumers in the form of compensation. The figures just twelve months later were closer to £403m. The numbers dropped in March and April 2011, but broker the £100m mark in July and the £200m threshold in August. These jumps are astounding to anyone who is not in the business, but it is the people who work in the FSA, banking industry and even the Financial Ombudsman Service (FOS) that have been affected most. In April of 2012, the pay-outs totalled more than £570m, which is the most since the beginning of claiming PPI compensation began.

Cumulative Totals are Mind Boggling

In April of this year, the total figure paid out in the form of PPI compensation rose over £4bn and the rate of pay-outs does not seem like slowing. The major lenders have now set aside a total of more than £8bn, but the question on everyone’s lips is, will this be enough? The major players have been commended by the FSA for their handling of the situation, but they are faced with so many individual cases that it can be hard to cope for even the most organised of institutions.

The Reason for so Many Claims

The general public, are now a lot more aware of the reasons that would justify a claim for mis-sold PPI. Here are a few of the reasons that would be acceptable for a mis-sold PPI claim:

1. It was unclear that PPI would not cover the length of the loan period.
2. It was unclear that the PPI would accrue interest, as it would be added to the principal loan amount.
3. The PPI was added to the principal loan amount without you being aware.
4. A lack of explanation for exclusions that could result in you being unable to claim PPI.
5. You were led to believe PPI would improve your chances of securing the loan.
6. PPI that was unsuitable was recommended to you.
7. PPI was not an option or a condition of you receiving a loan.
8. The fact that PPI was an option was withheld from you.
9. You came under pressure to accept PPI at the point of sale.
10. PPI was refinanced and you were due a rebate for an unused portion.

 Making a Claim

There are many ways to make a claim for PPI, but there are many claims management companies that can offer no obligation advice about your specific situation. There are time limits in place that state how long your case can reviewed and action initiated. This could be why so many people are claiming in recent months. Anyone who is uncertain about making a claim should speak to someone with experience in the matter to see if they have a case.