Act now on PPI as banks seek complaints cut-off

Published:
21 January 2013
Topic:
News,Money,Credit Cards,Loans,Mortgages

Now's the time to check if you were mis-sold payment protection insurance (PPI). The UK banks that did the mis-selling are pushing for a deadline on compensation claims in a bid to rein in the pay-outs they are forced to make. The total compensation bill is expected to soar to around £25billion.

The Financial Services Authority has confirmed that the British Bankers Association (BBA) has requested a time limit on PPI claims and would like the deadline to be April 2014. After this any further claims would not be accepted. Prior to the deadline, the banks would fund an advertising campaign encouraging people to complain and explaining how to proceed.

Consumer protection

However, the FSA is not keen on the idea. It said it would need to be convinced that any plans put forward by banks are in the interests of consumers. But the watchdog did not throw out the proposal altogether.

It explained: "A key consideration will be the potential to get compensation to more consumers, more quickly. However, no changes to existing FSA, or future Financial Conduct Authority (FCA), rules would take place without a full public consultation."

 

How to make a claim

PPI was usually sold alongside credit cards, store cards, loans and mortgages, in some cases without the knowledge of the buyer. Some of those who were mis-sold the insurance would never have been able to claim on it.

If you suspect you may have been a victim, you don't have to wait for your bank to get in touch, although they are required to contact you. And there is absolutely no need to use a claims management firm either as they charge hefty fees for something you can do yourself easily and free of charge.

If you believe you might have been mis-sold the cover you should write to the bank or lender concerned and explain your case. They are legally obliged to respond within eight weeks to tell you about the status of your claim or to ask for more information.

If you're unhappy with the outcome, you can complain to the Financial Ombudsman Service, which is there to solve disputes between financial services firms and customers. It is independent and free to use.

For more information on how to claim, read Mark Hooson's article.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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