Update: who is benefiting from the deadline on PPI claims?

They are not being denied the right to make a claim. They will have had 6 years by the proposed deadline. How long do people need to decide to do something?

Why put a time limit on people making valid claims? Many may have been put off making a claim by the number of nuisance calls about PPI and assume that it’s just a scam.

I was thinking along the same lines recently when I read that Barclays were having to set aside even more money to meet future claims and that other banks were having to do the same, and every time the so-called deadline gets extended the risk just keeps growing. I find it totally incomprehensible that such a high percentage of the policies purchased were mis-sold, and that over 24 BILLION pounds has already been awarded as compensation with provisions by banks already up to £32 bn. I mean, just divide the 18-65 population into that figure and see if you can believe it! Then double it because half that population did not buy PPI. The odds and winnings are better than the best lottery!

I realise that PPI was taken up by people not just to cover mortgage repayments but lots of other consumer loans and other credit arrangements, but was it all done in an underhand way? Was every borrower duped? Were there no cooling-off periods? Did no-one benefit from any of the protection offered by the policies? Is there a degree of punishment of the banks in the FOS’s treatment of the claims – and, if so, how does that help the economy? And what happened to any Insurance Premium Tax paid on policies that have been annulled – has the Exchequer also lost out to the tune of undisclosed billions?

I don’t blame people for putting in a claim – there’s been so much publicity about it and the claims industry has been running on stimulants for several years now so the number of claims is not surprising. But the number that have ben successful is the amazing thing, and I believe the Financial Ombudsman Service has made it almost impossible for the banks to deny compensation if there was the slightest error or omission in their fact-find before confirming a PPI policy or if they failed to ask three times if the customer wanted PPI. As you say, all the customers of the corporate banks are having to suffer as a consequence, and to a large extent the shareholders are suffering heavily for once [just look at RBS which mostly means the taxpayer]. I am not sure whether the mutuals have been exposed to PPI mis-selling to the same extent as the banks – I presume not although I seem to recall that Nationwide BS had set aside well over £100 million.

As a matter of interest, is payment protection insurance an unmentionable now, or is it so hedged about with safeguards and risk assessments that it has doubled in price? I happen to think it is a useful option in certain situations so long as the applicant is properly prepared and questioned. I guess a lot of people were so frightened or panicked into taking out PPI by false doom-laden prophecies, and then oversold a policy, that borrowers now tend to avoid something that could be a worthwhile safety net at the right price, for the right amount and on the right terms.