Payment Protection Insurance is a policy whereby if a lender is unable to work for example due to ill health; their loan repayments will be covered. However, although this sounds good in theory, many people who have taken out loans or mortgages have been mis- sold the insurance either by not being made aware they have it, or by not being given full details resulting in being unable to qualify for it when they have need to.
There has recently been a rise in the number of PPI complaints to the Financial Ombudsman Service (FOS). It has been reported that FOS is receiving approximately 900 new cases each day. Further figures show that in the first three months of the financial year, they received 56,025 new PPI complaints which means that 69% of all complaints to the Ombudsman were PPI related.
Banks were taken to court to dispute the way they sell Payment Protection Insurance as there have been so many reports of mis- selling. In April, the banks lost their case against the new rules that have been set on how PPI should be sold. They have since decided not to appeal.
Their defeat has led to a fresh surge of mis- sold PPI cases being taken on and speedier recovery of the complainant’s compensation. Banks have been budgeting millions of pounds for payouts to those who are successful in their cases for compensation.