PPI, otherwise known as payment protection insurance, was a financial product sold alongside a loan, credit card or mortgage. The deadline for claims was set for August 2019, but a year later, and banks could be facing more claims. A series of recent court rulings have found the products were ‘unfair’, focussing on the commission fees earned by banks from insurers.
In many cases, the large commission fees banks received were not disclosed to customers.
And commision made up more than 95 percent of the cost of the policy in the most serious PPI cases, according to the Sunday Times.
A 2014 Supreme Court ruling deemed a PPI product sold to Mrs Susan Plevin was ‘unfair’ as she was not made aware of the 71 percent commission fee, and she received a refund.
It was argued the so-called Plevin Ruling could set a precedent for future cases.
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This included if a person was in an accident, fell ill, lost their job, or passed away.
The FCA has stated as many as 64 million PPI policies were sold in the UK, mostly between 1990 and 2010, but some dated as far back as the 1970s.
While there is nothing wrong with the concept of PPI itself, many were mis-sold the insurance, and this is where issues arise.
In some cases, PPI was sold to individuals who would have never been able to claim, for example unemployed people who would not be able to claim for losing a job.
According to FCA data, more than £33billion has been paid back to individuals who have made complaints about the sale of PPI.
Last year, the FCA released an advertising campaign warning Britons that if they did not complain to their provider by August 29, 2019, they would not be able to claim money back.
Many have therefore potentially lost out on receiving compensation.
The FCA website, however, does state there is an ability for Britons to still potentially make a PPI claim.
It reads: “You may be able to complain to your bank or other provider, or to the Financial Ombudsman Service, after the deadline if you experienced ‘exceptional circumstances’ that meant you couldn’t complain in time.
“Your provider may ask you to explain the circumstances that caused you to complain after the deadline and why you think they were exceptional.
“You may also need to supply evidence. Your provider will assess this information and make a decision, using relevant decisions from the Financial Ombudsman Service”.
Exceptional circumstances are outlined as a serious illness, a business error, or a bereavement.