Banks are estimated to lose £4.5 billion through compensation for mis-selling their customers payment protection insurance (PPI), experts warn.
Have you been affected by payment protection mal-practice? Do you think compensation is enough to reimburse you for the money you lost, or the struggles you endured through being unable to claim on a faulty policy?
In total, the banking sector received 1.79 million complaints in the second half of 2010, the Financial Services Authority (FSA) revealed. The most complained about product was current accounts, followed closely by PPI which received 434,596 complaints in total.
The British Bankers’ Association (BBA) took the FSA and the Financial Ombudsman to court claiming the new rules were being applied to old cases, which would see them having to review all cases of PPI back to 2005.
The High Court ruled in favour of the FSA however, which could result in consumers receiving compensation for a mis-sold payment protection policy they have not even made a complaint about, if the BBA decides not to appeal.
From December last year, the FSA ruled that banks should sit down and explain a PPI policy to a customer taking out a financial product, so they understand the benefits and if they think it would suit their situation.
PPI is supposed to repay consumer’s loans such as credit cards, personal loans, and mortgages, when they have been made redundant from their job.
“Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints,” said the FSA in a statement.
Since the FSA took over regulation of PPI complaints in 2005, they claim to have received more than 1.5 million complaints regarding the product, and the majority of cases were found to be in the customer’s favour.
Tell us about your experiences with PPI and how you feel about British banks- are they manipulating their customers for their own profits, and should they be more heavily regulated?