When you mention PPI, the 1st reaction from people is “bloody cold callers”…. very true !, but there are still a large amount of people who still do not understand what PPI is and how this sorry mess came about.

The Mis-Sold PPI Story

Mis sold PPI is one of the largest issues to have rocked the financial world ever. Banks and others have been accused of mis selling PPI to their customers. This has happened all throughout the country, and the banks are finally having their feet held to the fire. People are actually starting to see some returns for the issues that they have gone through with their banks. It is a beautiful thing.

So far the average claim is running at £2,750 per every individual that has been able to successfully make a claim. That is £2,750 in your pocket that you probably had not been expecting. The way that the mis sold PPI bill is adding up, it appears as though there is a chance that this scandal could cost the banks much more than other scandals that they have experienced in the past.

If you are wondering just how much has been paid out on these claims so far, you might be stunned to learn that the number is currently at just under £13bn. This is a huge number that is hard to even imagine for most people, but that is where it all stands at right now. Part of this number is do to the fact that the banks have had to hire more people just to deal with this crisis. With all of this extra overhead just to deal with this issue, the number continues to climb.

The number of people who have been impacted by this scandal is estimated to be in the millions. There have been more than ten million PPI polices sold in just the last 7 years. As such, there are many of these policies that holders could make valid claims on. Some of the policies are obviously going to be valid and no claim can be made on them, but there are many that can still be claimed.

The current rate of complaints coming in over mis sold PPI policies is at an average of 400 per hour. The banks are having to deal with all of this because of the mess that they made when they sold these policies. It is not exactly that anyone should feel sorry for them. Rather, people realize that the banks caused themselves these problems, and they are going to have to figure out how to get out from under them.

The banks worked with credit card issuers to trick customers into taking out PPI policies that they would not be able to afford. They did not give these customers full disclosure over what was contained in the policies or give them information about if they really needed these policies or not. Most of the time, the banks were not outright lying to customers, but they were at very least not sharing all of the details that they should have with them. With these half truths floating around, people were easily duped into taking out policies that they did not necessarily need.

The house of cards would eventually have to collapse, and it did when the banks tried to file a lawsuit to prevent the flood of mis sold PPI claims that were coming into their offices. When this failed in the high court in April of 2011, the gates were opened even more for people to file these claims, and the banks were forced to make good on these claims. This is why they are handing out an average of £2,750 to each valid claim that makes it through. It is no wonder the banks fought so hard to prevent this when they saw what it was going to do to their bottom line.

These are the types of things that can happen when individuals as a collective look too much to the near term profits rather than try to see the broader picture of what is happening. Banks certainly did this, and it has now cost them dearly. Those who though that they could just continue to profit by manipulating customers into taking out policies that they did not really need have finally been made to own up to their decisions. It has meant that people who caused the problems are now having to deal with them. This is the way that it is supposed to work, and thankfully it is how it has worked in this case.

If you would like to read more on: PPI

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The cost of the PPI bank scandal to UK citizens can be measured both in pounds and the falling trust that consumers have in their banking institutions.

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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

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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.