The payouts could add up to billions of pounds, which the High Court ruled must be paid out to customers who were missold the insurance.
Payment Protection Insurance (PPI) is insurance that covered credit cards, loans or mortgage payments if you were unable to pay due to unemployment or illness.
PPI was mis-sold to millions of customers who would have been illegible to claim, whilst some did not even know they had signed up for it.
How to claim if you feel you were missold PPI 1) Check to see if the seller is registered with the FSA. If so, the FSA has compiled a PPI questionnaire that you can fill out and send to the firm that sold you the PPI. If not, write a letter to the seller, stating your claims clearly and including any documents that back up your claim.2) It is likely that the company will reject your complaint, however this does not mean that you are ineligible for compensation.3) Write to the firm again, restating your case and demand that the matter be resolved within 14 days. Warn that if the matter isn’t resolved, you will be forced to contact the Financial Ombudsman Service, which independently deals with complaints within the financial sector.4) If the matter is still not resolved, fill out the complaint form for the Financial Ombudsman and they will investigate your claim.
Today’s ruling means that banks will not only have to go through a backlog of complaints, but also contact customers who have not yet complained.
Oliver Morgans, financial services expert at Consumer Focus, called the ruling a ‘huge win for the millions of people mis-sold Payment Protection Insurance (PPI)’:
He added: “It has taken years of the banks being dragged kicking and screaming, but they are finally being forced to do the right thing by their customers.
“PPI is a clear example of everything that is wrong with the banking sector.
“It shouldn’t need the intervention of a High Court to ensure that bank customers are treated fairly.
“When 200,000 people complain to the Ombudsman and three-quarters of complaints are upheld, something is clearly very wrong.
Although the banks have already indicated that they will appeal the decision, Stefan Maryniak, credit expert at uSwitch, said that consumers had already been shown the support of the courts: “At a time when even government owned banks are struggling to regain consumer trust, this announcement could be the final nail in the coffin for the banking sector in regaining the public’s trust.”
“The decision to uphold the revised guidelines is recognition from the courts that the banks are in the wrong – they will no longer be able to dodge the bullet of PPI misselling even in the case of old sales.
“It’s also good news for those who haven’t yet sought compensation, as the doors now stay firmly open to make a claim, and the banks will have to face the music.”
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