What will be the real cost of PPI by June 2019?
When the payment protection insurance (PPI) mis-selling saga started, the City estimated that it would a few million to compensate customers.
Unfortunately for the banks, lenders and financial companies, customers were not so easy to appease. When the true extent of the PPI mis-selling scandal became more obvious, customers started to claim compensation in their drives.
And customers were not settling for token gestures, either.
What is included in PPI compensation?
PPI compensation can be worth thousands of pounds to one customer alone which means that, across the board, the PPI compensation bill for the banks is no longer millions, but billions.
In any PPI compensation payment, there will be:
- All the premiums a customer has paid over the time that they were sold and paying for the policy
- Interest at around 8%
- Costs and fees that may have been charged to the account as a result of PPI being added to it
How much are you due?
PPI compensation payments vary from one customer to another, and from one policy to another. Even though on the face of it, two claims may look and sound the same, the amount of compensation awarded can vary significantly.
There are many reasons why this is the case;
- How many PPI policies do you have? PPI was mis-sold on all kinds of credit products, from credit cards to personal loans, to store accounts and more. In some cases, it was also sold as part of mortgages too. The more accounts you have on which PPI was mis-sold to you, the more compensation you will be due.
- How long have you had the PPI policy or policies? Again, the longer you have been paying for the policy, the more money you are due back. Some people may have had their PPI policies on loans for years, culminating in a bigger compensation pay out.
- What kind of accounts was PPI added to? Credit card PPI were notoriously expensive as the monthly PPI premium was often calculated on a % basis of the amount outstanding on your account each month. The more you owed, the bigger the PPI premium. Calculating the amount due back is not complex, especially when you use a reputable claim management firm such as PPI Scotland to make your claim.
How big will the final PPI compensation bill be across all banks?
Estimates vary but many experts believe that by the time the proposed deadline of June 2019 arrives, banks and lenders will have paid out £37 billion in compensation.
Have you claimed your slice of PPI compensation yet?