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Millions set for £2,700 each in bank payouts after rip-off.

Billions of bank customers could be entitled to compensation from high street lenders after being the unwitting victims of the nationwide PPI scandal, reports the Daily Express. The Financial Ombudsman Service has ordered banks and credit providers to get in touch with their customers to alert them to the fact that they may be owed refunds in excess of £2,500. The banks have set aside as much as £7.6 billion to cover the costs of the compensation, and yet so far claims totalling only £1.9 billion have been made. PPI (Payment Protection Insurance) is sold alongside many different sorts of credit agreement – including personal loans and mortgages – to ensure that the debtor does not default on their loan if they find themselves unable to meet them through infirmity, illness or unemployment. High numbers of customers, however, were mis-sold the insurance. Some customers were never eligible to apply for it in the first place (such as the over-65s and the self-employed), while others were unfairly coerced into purchasing it via strong-armed sales tactics. In extreme cases, some customers didn’t realise they had bought it at all! Shane Craig, the managing director of Paymentcare.co.uk, told the paper: “This is a welcome window of opportunity for consumers – there is clearly a lot more to come out in the wash. “But we would like to think that there is still a place for this important cover when it is sold correctly to workers whose circumstances are such that back up cover to help pay the mortgage or simply get by day to day if they lose their jobs or get ill is crucial.” The FSA has ordered the banks to write their correspondence to customers in a concise manner, in plain English and without recourse to jargon. It should also make customers fully aware that they have six years from the date of purchasing the policy in which to make their complaint, or three years from when they were aware they had a legitimate complaint. Managing director, Martin Wheatley said the guidance marks a “key moment in the story of PPI”. As many as 130,000 PPI cases are expected to be settled this year, following a landmark judicial review that allows customers to claim for PPI that was mis-sold retrospectively.