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

Payment Protection Insurance (PPI) was designed to be a safety net to help people meet financial obligations when struck down by misfortune. Yet it has proven itself to be one of the costliest mis-selling scandals with a £24.2bn bill to date.

Despite thousands of new cases still pouring in every week, the Financial Conduct Authority (FCA) believes that a timebar is the solution to bring PPI to an orderly conclusion. But will it?

Drawing a line under PPI

Banks are reporting that PPI claims are falling, but the latest figures from the Financial Ombudsman Service (FOS) suggest that full settlement of the problem is still a long way off.

The FOS has revealed that as many as 4,000 new complaints are received every week. And in 2015-16 there were 188,712 new PPI cases, with 66% of cases upheld by the FOS.

The major banks have collectively set aside more money (£32bn) for potential claims than has been paid out to date.

Additionally millions are facing a deadline of sooner than June 2019. Around 5.5 million people were issued letters from their banks to inform them they may have a legitimate PPI claim to make. These letters gave the recipients a three year time frame to make claim and some three million of these letters were sent in 2013.

And as Wavechange pointed out:

If a company has wrongly sold PPI I am not convinced that they will sort out the problem themselves.

Clearly something isn’t working. The PPI scandal has been one disaster followed by another, it is the country’s biggest financial scandal with a wholly inadequate redress scheme.

The FCA has proposed an awareness raising campaign for June next year, but it’s unlikely to make much of an impact. Much more needs to be done. The FCA should call on the banks to ensure that those who were mis-sold PPI get back the money they’re owed before it’s too late.

Update: 2 March 2017

A deadline has been confirmed for claiming back mis-sold payment protection insurance (PPI).

Today the Financial Conduct Authority set a deadline for claims to be made by 29 August 2019.

Since January 2011, £26.2bn has been paid out for mis-sold PPI. The total amount set aside by the big five banks alone is more than £35bn – as many people are still yet to claim the compensation they are due.

Our Director of Campaigns and Communications, Vickie Sheriff, said:

‘It’s been clear for years that the banks should be working much harder to resolve PPI claims fairly. The current process has been wholly inadequate and driven too many consumers to use claims management companies.

‘Now the regulator has confirmed a deadline for the victims of this mis-selling scandal to make a claim, it must ensure that banks are doing much more to help customers get back the money they are owed.’

Importantly, those who’ve previously had their claims rejected are able to claim for ‘undisclosed high commission’ on PPI. This comes following a Supreme Court ruling in Plevin vs Paragon Personal Finance Ltd.

If you’re concerned that you were mis-sold PPI and want to know how you can claim this back then take a look at our PPI mis-selling checklist. We’ve also created a PPI claiming tool that allows you to keep 100% of your compensation.

So have you tried claiming for PPI, how easy did you find it? Would you like to see banks do more to reach out to potentially affected customers? Or do you think that they have done enough to resolve mis-sold PPI claims?