FAQ: Payment Protection Insurance FAQ's
Size Of The Payment Protection Insurance Problem
Whilst the problem surrounding the mis-selling of PPI is no longer something which is unheard of, the scale of the issue can sometimes be overlooked.
Since the mis-selling of PPI was brought to the public’s attention, there have been millions of claims lodged, with payouts exceeding £1billion in 2011. Numerous reports have documented the cases of those involved but exact figures of how many people might have been affected, and how many of those are yet to claim, are still unclear.
The reason for the large size of the problem is that the mis-selling of PPI did not just occur on one product from one financial body. Instead, a number of financial bodies were found guilty of this action, being fined by the Office of Fair Trading (OFT) and facing numerous complaints and claims from their customers.
The policy was also mis-sold over numerous products with any type of money lending or credit agreement likely to have been affected. This means that loans, credit cards and even mortgages could have been involved in the scandal.
On top of this, PPI was not always labelled as this on the agreements – meaning that many people remained unaware that it had been added to their policy, even after the scandal had become public knowledge. In some cases, PPI was called “mortgage protection insurance” or even “accident and illness insurance” instead, thus widening the number of cases which may have been affected.
It is estimated that millions of consumers have been affected by the PPI problem, with more than 1.5million claims being lodged since 2005.
Experts within the field estimate that there are still a significant number of consumers who are yet to make claims, with the Financial Ombudsman Service (FOS) estimating that they anticipate receiving 285,000 new cases this year alone.
This is in addition to the 259,000 new cases which they received in 2011 – demonstrating how the situation appears to be escalating rather than diminishing as time goes on.
Details on the number of cases handled by high street banks also demonstrate the true gravity of the current problem. Major banking groups were all involved and have received a vast number of complaints since the fallout.
The figures from banks and financial companies spell a clear picture of how widespread the selling of PPI was – with many of the policies being mis-sold to consumers.
In terms of settlements, numerous banks and lenders have made compensatory payments to their customers. More than £1billion was paid to those affected in the first of ten months of 2011.
The size of the PPI problem is therefore clear – with numerous lenders facing backlash from those affected, establishing whether you are entitled to claim is advisable and could see you reclaim the money which you may have lost.