Why isn’t PPI Compensation Automatic?

It seems that, wherever you turn on the Internet, there is an advert suggesting that you are entitled to thousands of pounds in compensation for mis-sold payment protection insurance (PPI).

The blurb goes on to say that because the mis-selling problem is so vast across the country that virtually everyone who had a loan or credit card etc. in the last decade or so, will be entitled to make a claim.

This leaves the burning question, why is the refunding of people’s monies not automatic then?

Reason 1 – the bank are not keen on giving their money away

The first reason is quite obvious. Banks are not too keen on giving their money away, especially it means they are giving it to people who are not entitled to it.

This argument, of course, is weak in the face of how banks and lenders took money from their trusting customers to pay for a product that of little, if any use to them.

Reason 2 – it is written in consumer law

Secondly, the reasoning for proving you were mis-sold the policy is actually written in consumer law. In the same way as in other cases, innocent until proven guilty still applies to the banks. You may know you are the wronged party, but you still need to show the bank that you were and, to a certain extent they still need to prove that you were wronged.

If they do not agree with your reasoning, they can refuse to pay out but, just like in a court of law, you have the right to appeal this decision. In the case of mis-sold PPI, these rejected complaints can be submitted to the Financial Ombudsman Service who will examine the case in greater detail.

They will make the final decision, either agreeing with you and upholding your complaint in your favour, or agreeing with the bank, giving you reasons why they feel the sale of the policy was fair.

Reason 3 – it was not unsuitable for everybody

Even though the mis-sale of PPI was indeed wholescale across the country, trapping thousands of customers in the sticky mis-sold PPI web of deceit that the banks and lenders wove, it is not a product that was unsuitable for everybody.

That said, however, take heart as even some of these customers who would need PPI in order to be a responsible customer, could have sought a similar, if not the same identical policy elsewhere for a much cheaper premium without having to purchase the bank’s own PPI policy.

The awarding of compensation may not automatic but, with Payment Protection Scotland you will have a much better understanding of the whole PPI compensation claiming process. Why not call us?

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