Payment Protection insurance
With the discovery of mis-sold Payment Protection insurance (PPI) last year, the month of November brought a record high number of pay-outs. An estimated £379m was paid in compensation. According to the Financial Services Authority (FSA), these figures show a huge increase on October, which saw the banks paying out £268m.
The policy was implemented to repay individuals loans if their income was dropped as a result of illness or job loss. However, were people aware they were being sold this protection? And was it sold accordingly?
A large majority of people that were sold PPI my not have even known they had this cover. The main reason for this would be, if you were sold your loan over the phone, the salesman may have forgotten to mention the additional insurance.
The figures that are supplied to the FSA are by 16 unnamed firms. These firms accounted for 92% of all PPI cases in the first six months of 2011.
Early last year the problem was uncovered, the public felt cheated by what leading companies had done to them. As a result banks were told to deal with 200,000 complaints that had previously been pushed to a side pending the hearing’s outcome.
At the start of this year, the Financial Ombudsman Service (FOS) was astonished by the 10% increase in PPI complaints in the final three months of 2011.