Reclaim Mis-sold PPI
It is now payback time for banks after running one of the largest financial rip-offs in the UK and millions of customers are busy making PPI claims with no paperwork or documents. Most claims are proving to be successful and that means consumers have pocketed billions of pounds in the last year but one question that many consumers are grappling with concerns the cost of filing a PPI claim.
This cost can vary from nothing to as much as 30% of your PPI refund depending on the route that you take to make your claim. When you file for PPI compensation on your own without incorporating any third party claims management companies, then you get to pocket all the refunds. You will however part with as much as 30% of your payout if you use third party PPI companies to make the claims on your behalf.
Making the PPI claims on your own-zero costs
If you feel that you might have been mis-sold PPI when you were taking your loan or mortgage, you can write to your lender to file for PPI compensation. There are lots of letter templates and questionnaires that you can download from the internet for use in the filing of the PPI claims.
In case you have not reached a proper resolution with your lender regarding your PPI refunds, you will need to write to the Financial Ombudsman office which arbitrates over disputes between lenders and their customers and is currently handling millions of PPI claims. This process may take a long time but when you are successful, you get to keep all of your money.
Costs associated with filing for PPI compensation claims via a claims management company
Many people who were victims of the PPI scandal are opting for this route and it is by far the most expensive. In this case, the PPI Claims management company will handle your claims every step of the way but they will charge you a hefty fee in case the claim is successful.
Most PPI companies charge 25% of the refund plus VAT. Assuming the average PPI compensation is £2500, you will end up paying up to 25% of this value which is £625 plus VAT of 20%. 20% of £625 roughly translates to £125. So from PPI refund of £2500, you will end up paying the PPI company £750 or 30% of the total compensation. PPI management companies are quite costly so it is advisable to manage the paperwork on your own so that you can keep all of your refund. Besides, some of them will charge you some upfront and consultation fees.
PPI has many names. Sometimes it is called lifestyle protection or accident protection plan. It is also known as sickness protection or unemployment cover. PPI stands for payment protection insurance and this is supposed to be a safety net for all kinds of borrowers who have personal loans, mortgages, credit cards or store cards etc. This insurance, though useful, is expensive and when the scandal of PPI surfaced in UK, there was a disclosure that the amount involved in the scandal would run into billions of pounds.
With the relevant actions taken by the FSA and sanctioned by the High Court, the campaign for the refund of mis-sold PPI became one of the biggest campaigns in the history of finance in the UK.
Enlightenment on the PPI mis-selling
There were many factors that contributed to the awareness of the mis-selling of the PPI or payment protection insurance. Firstly, Which? Magazine brought light to the matter. This was followed-up by other newspapers. Then the scandal was supported by Financial Services Authority; and eventually appropriate actions were taken by other bodies like the Financial Ombudsman, British Banking Association and High Court.
The initial imposition of penalty to small lenders was followed by penalties on bigger lending institutions. It became clear that a great number of PPI policies were mis-sold in the past and actions were needed to curb this practice of financial institutions.
Reason for the huge number of cases of PPI mis-selling
There was a big number of mis-sold PPI due to the following reasons:
- There were a lot of borrowers who just conceded to the payment of PPI due to the need for the loan approval.
- The borrowers were not given any options by the banks and the lending institutions. They were never told about that PPI is optional.
- Many borrowers were deliberately uninformed so there were no contradictions on the part of the uninformed clients or borrowers.
- Banks and other lending companies continued to impose the PPI payments on the customers and were happily making additional income without any benefits to the customers.
All in all, you can conclude that the number of cases of mis-selling of PPI policies increased due to the ignorance of landing institutions and mis-information to the borrowers; this scenario was exploited by the lenders who wanted to make more profits in the loan transactions. If you feel you have been mis-sold PPI a claim company like http://www.claimrefund.co.uk may be able to help you make a claim, without needing any original paperwork.