The long awaited deadline for claiming PPI ends is today at 11:59pm on the 29th August 2019. Whilst Britons have heard almost a year to prepare for this day, the fast approaching deadline has sent thousands into a frenzy trying to claim back an average of £2,000. So far today, there have been numerous sites that have crashed from too much traffic including major banks Santander and NatWest.
Many people ended up being unknowingly sold payment protection insurance from the 1990s onwards up until 2006. A lot of the time, the policy payment was added to their bills or it was sold as an ‘essential’ item on different loans and mortgages or provided to those who were self-employed, and therefore ironically to people who would never have been able to make a claim on the policy. After midnight tonight, it will no longer be possible for people to make a claim to get their money back – but there are still potentially billions at stake, with most people not even realizing that they have a claim…
How much money is owed in PPI compensation?
According to estimates, the PPI scandal will cost the banking industry a whopping £44 billion in compensation once all the claims have been received.
In statistics released by the Financial Conduct Authority, the industry regulator, over £36 billion has already been paid out since January 2011.
The average compensation payout is around £2,000 each, therefore, checking whether or not you have been mis-sold PPI in the past, and applying by 11.59pm today could be worth it.
How do you know if you have been mis-sold PPI?
The first step you should take is to look out any documents you have previously signed when taking out a financial product (such as a loan, credit card or mortgage). Checking the terms and conditions of these documents is important when trying to clarify if you have been mis-sold PPI.
It is also worth remembering that PPI has been sold under a wide range of different names in the past. To help make checking for a PPI policy easier, the FCA has created a list of terms to look out for:
PPI may have been sold as:
- Account cover
- Accident, sickness and unemployment insurance (ASU)
- Loan insurance
- Loan protection
- Credit insurance
- Credit protection
- Payment cover
- Mortgage payment protection insurance (MPPI)
- Protection plan
You should also be asking yourself some of the following questions to see if you answer yes to them as it may mean it is worth making a claim:
- Were you told it was necessary for you to have PPI?
- Was PPI added to a financial product without you being informed
- Were you retired and advised to take PPI?
- Were you unemployed or self-employed, and encourage to get PPI?
- Was it made clear you would need to pay interest on the PPI if it was added to a loan you took out?
How to make a claim for mis-sold PPI
There are a number of free PPI-claiming tools to help you get started with the claims process, but sorting it out yourself is also easy to do.
You will need to have policy paperwork handy, as well as provide your date of birth and current and previous home addresses. You will need to contact the business who sold you the PPI product and provide them with the aforementioned details. As time is running out, contacting them by phone or online will increase your chance of being able to make a claim prior to the deadline.
Claims management companies will be affected
Despite being free to claim PPI, a vast number of claims management companies (CMCs) popped up virtually overnight to help people claim their stake. Charging commission of around 25% and using aggressive sales tactics by text message, phone and email, PPI complaints reached over 3.3 million in 2018, more than any other type of financial product.
One of the reasons for the FCA’s deadline was to bring the aggressive sales tactics to an end, but this will no doubt encourage CMCs to turn their attention to other emerging compensation products.
What is the next big compensation claim?
There has been a huge growth in the number of compensation claims for payday loans, with over 3 million loans funded very year since 2011, millions of customers have been sold loans that they could not afford due to being on benefits, unemployed or failing affordability checks. The outcome for many has been revolving debt which has turned a basic loan of £200 or £300 to a debt worth ten-fold. Many CMCs have turned their attention to compensation claims for payday loans, also known as high cost loans or no guarantor loans, and so far Wonga.com has paid out over £400 million worth of claims.
Elsewhere, the FCA continues to investigate a number of industries including rent-to-own, guarantor lending, equity release and car finance. A review of companies offering life insurance was conducted in September 2018 and the result showed a very fair treatment of longstanding customers.