There are many things that are contributing to the stress that banks are feeling lately. For one thing, people are not making as much money, so they are not saving as much of it in the banks. They need to spend all that they have, living from one payday to the next.
People are also not taking out as many loans for things like new cars or new homes simply because they know that they cannot afford them. This means that banks are not making any money off of the interest rates. To add to all of this, they are seeing a stunning rise in the amount of PPI – or Payment Protection Insurance – claims in recent days, a rise that is almost putting many banks under.
There are two different types of claims that are being made. One of them is more damaging to the banks than the other, and it will be explored first. This type of claim is when people say that they were mis-sold their insurance policy and they want all of their money back. The second type of claim is less damaging, but can still be hard for banks as they are running low on spare cash. These types of claims are from people who actually need to have the insurance money for the right purposes. They need help making the payments on their credit cards, loans, and mortgages. These will be explored second in further detail.
Claims For Mis-Sold PPI
The claims for mis-sold PPI basically come about because banks were not very kind to their customers when they sold them the insurance. Many times, they told the customers that they had no choice, forcing them to pay for a policy that they did not want and did not need. These people now want to get all of their money back since the courts have ruled that what the banks did was illegal. The banks are obligated to refund all of the money that these people have been paying for years on end, so the sum is quite large. Banks also mis-sold the policies through omission. They did not explain all of the rules. They did not tell people what the insurance could do or how much they had to pay for it. The terms and conditions were ignored. In some cases, the policies were even represented in a way that was not honest or true. This convinced people to buy policies that did not help them. It also forced them to pay for things that they would not otherwise have agreed to pay for, basically conning them out of their money.
Claims Where Legitimate PPI Help Is Needed
On the other side of things, there are also more legitimate PPI claims being filed. People are really struggling financially, and they are not always able to make their payments on time. They might not be able to make them at all. They are contacting the banks and asking for the help that was promised so that they do not incur interest and even greater debt. While this does not hurt banks in the same way, it does mean that they need to pay out even more money. This is happening while they are not taking in as much as they used to, so it can be difficult.
PPI Claims News
PPI Claims are falling according to regulator
Complaints about PPI Claims have fallen for the first time in three years according to the Financial Conduct Authority (FCA). In the 1st half of 2013 1.8 million PPI complaints were recieved compared to 2.2 million PPI complaints recieved in the previous 6 month.
However reports like these need to be questioned based on figures reported previously from the FCA within the 1st half of the year.
PPI Complaints to Cost the Banks an extra £400m in fees to FOS
Banks in the UK are set to be charges an extra £400m in fees by the Financial Ombudsman service (FOS) for dealing with PPI complaints. The FOS charges a standard fee of £550,00 per complaint regardless of whether the complaint is upheld against the financial insitution or not.
Our Successful PPI Claims featured on BBC1 – Ripoff Britain
Ripoff Britain on BBC1 with Gloria Hunniford, investigates mis sold PPI and one of our succesful clients, Steve White, discusses his PPI Claim.
We have provided a transcribed version of the Clip below
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
Latest posts by Tim Capper (see all)
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- FCA updates PPI redress for 2.5 million old PPI complaints - October 27, 2014