PPI claims could amount to thousands of pounds for an average policy holder. According to the Financial Services Authority, PPI claims per customer reached an average of £3,500. The total refund may be higher depending on the type of loan you had and the interest rate used by your bank in computing the refund.
PPI claims are allowed only when the customer has been misled into buying a payment protection insurance. Thus, PPI claims may be refused by banks if the customer agreed to the terms and exclusions of a payment protection insurance policy. Customers sometimes find themselves in a difficult situation explaining why they signed a PPI contract if they don’t agree with its terms and conditions.
According to the Financial Services Authority, anyone can request for a refund of PPI if the policy is mis-sold. In some cases, a complaint should be referred to the Financial Ombudsman Service. However, customers are encouraged to contact their banks first and ask for a refund. Banks may need several weeks or months to reach a decision, but they are expected to respond within eight weeks upon receiving a complaint.
The government is requiring banks to review their sales practices and identify areas of improvement to prevent mis-selling. Stricter regulations now hold banks accountable for not recognizing and revising their deceiving sales strategy. If you experienced the following scenarios, you can demand redress.
Not informing a customer of his right to choose other PPI providers is a form of mis-selling. Customers should demand refunds even if they signed the mis-sold policy. Some banks have denied a claim if a customer signed a PPI policy. However, the FOS ruled that a signed document is not the sole basis in deciding whether an insurance is mis-sold or not. Customers are entitled to compensation if they were told that a PPI would increase their chance of getting a loan or credit card. The practice of including credit protection charges in monthly bills was common. Customers who weren’t informed that their loan or credit card would have PPI charges are entitled to make a claim.
Complaints are valid when the seller prompts a customer to buy a PPI he doesn’t need. Some people had pre-existing PPI, but their banks still prompted them to buy a separate coverage. These banks are required to approve the PPI claims of the customers since they were not informed that a second insurance is optional. Self-employed people and students are often entitled to get a refund also.
Processing PPI claims has become less complicated and faster. However, many PPI customers are still waiting for the decisions of their PPI sellers or the Ombudsman. Specialist companies specialise in handling complicated cases. Because mis-selling can be a debatable topic, some customers turn to claims experts who are more knowledgeable in handling insurance disputes. Claims management companies charge a fee though. Customers who do not want to incur any costs in reclaiming their PPI should only turn to claims management companies when their banks refuse to give a refund.