The controversial industry of mis-sold PPI is exactly one year away from its deadline . With thousands of complaints every day by British consumers, the City Regulator has established a date by which all claims must be made.
Payment Protection Insurance (PPI) was an add-on sold to millions of consumers in the UK for financial products such as mortgages, car finance and loans. The purpose of PPI was to help you pay for your assets or debts in the event that you fall sick or are injured. However, it emerged that the policies sold by banks were void and actually did not provide any cover – but significantly increased commissions for providers and brokers.
Subsequently, the UK banks put aside £35 billion for individuals to claim on any mis-sold PPI and over the years, households have been able to reclaim a few hundred to a few thousand pounds.
This huge industry also led to a surge of claims companies trying to offer their services – helping you claim PPI and taking a fee for the transaction. Many households have been disgruntled at the vast number of unsolicited emails, calls and text messages relating to the mis-sold product, something that has led to 3,000 complaints to the Financial Ombudsman Service around per week.
Despite the fact that individuals can claim it themselves, without a broker, the regulator has confirmed a deadline of 29th August 2019 for all claims to be made – and any future claims will not be permissible.
With the claims companies pushing for business through email, social media, TV and radio, the compensation firms are now looking for new opportunities.
One sector that is growing quickly for compensation is payday loans . The high-cost loans are currently used by 3 million people in the UK each year and lenders have regularly been criticized in the press for charging high interest=ates.
Whilst there are around 50 payday lenders in the UK and several legitimate ones, some lenders have been targeted as mis-selling loans to those that cannot afford them. The lack of adequate credit and affordability checks has put thousands of customers in a position where they cannot repay them and are pushed into a cycle of debt.
It was recently announced that the UK’s largest payday company, Wonga.com, has been the recipient of a £10 million bailout, attributing their severe losses to a surge in compensation claims.