Why do claims for PPI compensation have to be made? Can’t the banks just refund people?
There are many people who have been asking this question for some time and the answer is a complex one.
Do the banks know who they owe PPI compensation to?
The banks and lenders do know who they sold a payment protection insurance policy to. There were millions of policies sold to customers of most banks and lenders in the UK. Although they say they don’t hold on to such information, the Financial Conduct Authority has been clear that when banks and lenders have this information, they are expected to act on it.
Is everyone who was sold PPI entitled to compensation?
No. And this is the difficulty that stops wholesale compensation to every customer. Just because you have PPI, doesn’t mean that it was not suitable for you.
That said, many customers who have PPI are entitled to claim compensation as it was mis-sold to them but there are a small minority of policies that were sold correctly.
What do consumer laws say about compensation?
This is another layer of complexity.
The law states that if a customer thinks they have been mis-sold a financial product, they need to claim compensation by telling the bank or lender why they think this has happened. In other words, a customer needs to complain about the product and seek financial redress.
Although the PPI compensation saga is unprecedented – nothing like this has ever happened before in the history of British banking – the regulatory authorities cannot simply by-pass the law.
Hence, customers need to complaint to their bank, lender, credit card provider, car finance company, store card accounts and so on about PPI. As part of this complaint, you need to tell them you were mis-sold it and why this was the case.
Why are the banks and lenders still saying no to some customers claims for PPI compensation?
It is the bank or lender’s right to defend their actions against a customer complaint. If a customer says that they would not have bought the policy if they had known that their existing illness was excluded, the bank may say in return that they told you to read the small print…
There can be all kinds of complexities. In essence, you say that the PPI policy was not suitable but the bank say it was a suitable policy for you.
As a claim management company specialising in PPI claims, we are best placed to help you with your claim. Why not call for a no obligation chat?