British banks have made the correct choice – to pay refunds for the large amount of Payment Protection Insurance (PPI) mis-selling which has been taking place over the years. The decision the banks made, in dropping their case against the Financial Services Authority’s (FSA) instruction to buck up and pay up, has certainly been the correct choice.
It has only recently come to light how much the banks have been mis-selling PPI policies over several years. When the customer credit market saw a large increase, the banks didn’t carry on meeting customers needs and matching them up with appropriate products suitable for them, but instead began to sell products that in some cases their clients didn’t need.
Countless numbers of people have been sold PPI policies, when they should never have been – those who are self-employed and so couldn’t claim even if they wanted too, and those with certain conditions which would also disqualify them from being covered by the policy.
A figure of £4.5billion was the first estimate of the cost of redress according to the FSA. It was then said by the chairman of the All Party Parliamentary Group that up to £5billion would be the starting point of any refunds. This then lead to huge uproar from within the banking sector, as he had also stated the bill should be paid by themselves – and not by the financial services sector.
Not surprisingly, he now feels vindicated: “We have been proved right in our arguments that PPI compensation is the responsibility of the banks and that the costs shouldn’t be spread across other parts of the financial services sector, although some such as credit brokers might still be impacted. I also feel very comfortable with what I said about the likely quantum earlier this year and which was criticised by the banks. Indeed, my suggestion that it could easily reach £5bn is now starting to look conservative,” said Mr Evans.
WhenBritain’s top bank announced it would withdraw from collective legal action and pay refunds, other leading banks naturally followed suit. An estimated three million people have claimed for mis-sold PPI, with half this amount having already appealed straight to the FSA.
Sally Bowyer, Managing Director of leading claims firm, BrunelFranklin.com said: “We continue to see a huge increase in PPI refund applications as public awareness gradually rises. Cases of mis-selling are still coming to light; as people feel the financial squeeze and learn of the PPI refund successes of friends, family and colleagues, the upward trend in the number of people seeking refunds is likely to continue for the foreseeable future.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.