Let’s talk about PPI…
It is a scandal that seems to have been going on for a long time now. What is this PPI thing all about?
Banks and lenders sold an insurance policy – generically known as payment protection insurance (PPI) – to thousands of customers.
The problem was, not all these customers wanted it and they certainly didn’t all need it. But the banks carried on selling it to people.
But why did customers buy it, if they didn’t need it? Surely they could have just said no?
Some customers did try to say no but were told that they had to buy it. This of course, is not correct as no one has to buy insurance from a bank, you can buy a policy from anywhere. There were also cases where some people had no idea the policy was sold to them.
What do you mean, they didn’t know it was sold to them?!
In some cases, PPI was added at the time of purchase as part of the deal and customers were either not told about then, or it was added at a later date. In many cases, it simple appeared on their account and not all customers were told this.
So, what happened?
Someone back in the mid-1990s found out about this and they made a complaint. At the same time, a consumer organisation, Which? Made a complaint to the Office of fair Trading about the selling practices of some banks and lenders that they considered to be against the rules, as well as unfair and heavy-handed.
Right. So the banks were told to pay compensation?
No, it didn’t quite happen that quickly. There were all kinds of legal arguments back and forth. It wasn’t until the year 2000 that all the legal arguments were done with and the banks and lenders who had mis-sold thousands of PPI policies to thousands of people, were told they had to compensate customers.
So why do customers have to ask for compensation? Can’t the bank just give them their money back?
There are laws that govern this kind of thing. Thus, in line with the consumer law that governs compensation, the customer has to tell the bank why they mis-sold them the PPI policy.
It does but in reality, it is not so tough. Most people who were sold the policy have a reason for compensation and there are so many reasons why you may have been mis-sold the policy that often, customers have more than one point to prove they were mis-sold PPI.
Can I claim compensation?
Call Payment Protection Scotland to find out.