Mis-Sold PPI Compensation Reaches Record High

The amount of money being paid out on mis-sold payment protection insurance, (PPI), hit a record high in November 2011. The cover was routinely sold alongside the loan in order to protect repayments should the customer get into financial difficulties, but many were sold the protection without approving it, with compensation reaching a staggering £379millon.

The number of complaints received by the Financial Ombudsman Service, (FOS), increased by 10% to almost 56,000 in the final quarter of 2011 in comparison with the previous three month period.

Lenders have been including the policy without the knowledge of their customers, which has prompted the huge push to reclaim the money they’ve been paying. The majority of customers had the insurance included in their loan agreement without agreeing to it or asking for it, making it illegal for the lender to do so. It is currently estimated that by the time mis-sold payment protection insurance has been returned, lenders will have shelled out as much as £9billion.

A joint consultation was launched back in November into how problems associated with PPI can be prevented from resurfacing. The Financial Services Authority, (FSA) and the Office of Fair Trading, (OFT), finished their consultation in mid-January, and Jubilee – the specialist Lloyd’s insurer – is now pressing for the two agencies to provide regulations in order to allow the PPI market to grow.

Chris Biles from Jubilee said in a statement “Anything which helps to clarify the responsibilities of both the distributor and insurer has to be welcomed. However, the FSA and OFT must recognise that there are clear roles for both lenders and insurers in helping to ensure that borrowers have access to appropriate ways or reducing the risk of being unable to maintain their loan repayments.”

Unfortunately, it seems that mis-sold payment protection insurance is something we’re going to continue hearing about for a few years to come. For that reason, it makes sense to contact Creditline Financial, who will tell you how to claim back PPI.

Should you require further information, then you can contact us and we’ll be happy to investigate your query, aiming to give you back the money that is rightfully yours.

Posted by Chris White on 03 Feb 2012