Banks may be complaining about PPI Claims, the FSA may be complaining about PPI Claims but the economy needs PPI Claims !
PPI Claims and the Economy
With approximately £ 10 billion have been set aside by Banks to cover mis-sold PPI Claims that were sold to consumers over the past decade, this may prove to be the boost that the economy has needed.
The National Institute of Economic and Social Research (NIESR) said that even by a conservative estimate, a £10 billion PPI payout in 2012 could have the effect of raising GDP by 0.1%.
Simon Kirby, a senior research fellow at the institute, said: “PPI payments are a boost to household finances which are broadly the same as having a temporary tax cut.”
Jonathan Portes, NIESR director, said the effect of the PPI windfalls was greater at a time of recession: “From an economic point of view, the timing of these payouts is quite good. This is a good time for the money to be flowing into the economy.”
The GDP figures emerged as a result of research by the Financial Times, which spoke to Elaine Overten, a retired nurse from Derbyshire, who received compensation for PPI payments made on her mortgage.
PPI Claims in 2012
Some £4.8 billion in PPI compensation had been paid out by May this year and £5 billion is still to be claimed, according to consumer group Which?. The body has been campaigning to make it easier for people to make claims directly rather than use claims management companies which often take a quarter of any payout.
The British Bankers’ Association confirmed in May last year that it was not going to appeal against a High Court ruling that rules relating to the mis-selling of PPI could be applied retrospectively. The Financial Ombudsman Service (FOS) has said it expects to settle a record number of PPI cases this year at around 130,000.
PPI Claims News
Banks rejecting legitimate PPI Complaints
The recent increase in PPI complaints being recieved by the FOS is a direct results of Banks rejecting increasing numbers of legitimate PPI complaints being sent to them. The FOS has upheld 8 out of 10 PPI complaints forwarded to them.
This 80% of upheld complaints by the FOS highlights how the Banks are increasingly rejecting valid PPI complaints being made by customers.
PPI Complaints still rising for the Financial Ombudsman
A record 86% of all complaints made to the Financial Ombudsman service is about PPI mis-selling. In the first half of the year a reported 266,228 PPI complaints for mis-selling have been lodged.
PPI complaints show no sign of slowing down. We have recently reported that Barclays was recieving an estimated 1,500 PPI complaints per day, The FOS was recieving upwards of 2,000 PPI complaints per day in July
This backs up the theory that only around 1 in 10 people have actually made a PPI claim based on their mis-sold policy. With figures like these, we can expect to see PPI complaints rising for a while longer.
PPI Compensation payments boosting the economy
The Office of National Statistics has released figures suggestiong that the £10 billion in PPI compensation payments that have been made is boosting the economy.
This is nothing new in March we published an article where an analysis by Which? showed that UK consumers paid out £50 billion for PPI protection since 1996. The article also highlighted some other PPI statistics provided by the ONS :
The Financial Ombudsman Service (FOS) has been buried by more than 600,000 complaints about PPI since 2000. Nearly half of those complaints have been filed since July1, 2012. Between that July date and the end of December in 2012, 283,251 complaints have been filed with the ombudsman. That was an increase of 110 percent over the previous six months.
Monthly PPI Claims Payouts for July 2013 is £ 528 m
The Financial Conduct Authority (FCA) released its latest totals on monthly PPI Claim Payouts. July 2013 totals for PPI repayments was £528 million which brings the total of PPI Claims repayments made sine January 2011 to £11.5 billion.
The figures are collected from 26 firms and financial institutions that made up for 96% of all the Payment Protection Insurance complaints from last year.
Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim