FCA (Financial Conduct Authority) has launched a new set of guidelines on August 29, 2017, so that all the PPI policyholders can claim PPI more easily. FCA has launched an ad campaign in the form of a consumer awareness program. The major banks of UK are funding for this ad campaign. And, now they are expecting many more consumers to claim PPI compensation for a PPI policy which was mis-sold to them before.
FCA has given a deadline of August 29, 2019, to claim PPI compensation for all the consumers. This ad campaign is to make all the consumers aware that they can claim PPI refund for a policy which was mis-sold to them in the past.
The banks have kept aside £43bn to handle PPI claims and pay the customers in the next two years till the deadline of 2019. This total expense which is expected is inclusive of the cost of handling all the claims.
As per the new guidelines set by the FCA (Financial conduct authority), many consumers whose PPI claim was rejected before can also make a complaint now to claim PPI. The FCA has made a list of points which would help the consumers to understand whether they have been mis-sold a PPI policy by their banks or credit lenders.
PPI policies were sold to customers under different names such as credit insurance, loan protection, loan repayment insurance, account cover, payment cover or ASU (Accident, Sickness, and Unemployment) insurance.
PPI (Payment Protection Insurance), is an insurance sold to consumers along with other credit agreements such as a loan, credit card, mortgages and more. The concept behind PPI policies is to help the policyholders pay their credit amount in extreme situations such as job loss, sickness or physical disability.
This PPI scam has been by far the biggest scam in the UK. Where most of the PPI policyholders were unaware of a policy being sold to them. Many consumers who were sold a PPI policy by the credit lenders, were not even covered by PPI as they were either self-employed or retired. FCA is monitoring this closely to make sure that the PPI compensations are paid out to the consumers who deserve a refund.
According to a report by FCA, almost 12million people are affected by this PPI scam. Almost 60 million policies were sold to consumers and most of them were sold before the year 2005. So far, 12 million people have made a claim for a PPI refund. It is estimated that claims have been made for 20 – 24 million policies. Consumers whose PPI claim was rejected previously are now eligible to file a claim as per the new guidelines which were launched on August 29, 2017. They are now expected to claim PPI refund. The industry is expecting consumers (who have not made a claim so far along with the ones whose claim was rejected previously) to make a claim for their mis-sold policies in the next two years until the deadline August 29, 2019.