It has been a long time coming, but it looks as though the Insurance industry as a result of intervention by the Financial Services Authority (FSA) has had its come-uppance and has been forced to take an active role in finding out who has been mis-sold PPI and is therefore due repayment and compensation in the form of interest. The straight-thinking consumer must be wondering why it has taken so long for common sense to prevail.
Up to now it has been up to individual customers who think that they might have been mis-sold Payment Protection Insurance (PPI) to make a claim. This they could do either personally or they could involve a company which specialises in this. Unfortunately therein lies another dilemma, who to trust after the PPI fiasco? Once bitten twice shy, but never fear there are lots of reputable companies working on a no win no fee basis [Cancellation charges may apply only if the claim is cancelled after the 14 days cooling off period. The fee would be based on the work done at the time of cancelling at a rate of £120 per hour and up to a maximum total of £180]. The problem with this set up is that millions of people are still blissfully unaware that they may be entitled to a refund as not many general customers who took out payment for a loan or purchase such as a TV actually read the financial papers and they may have missed all the news articles concerning this.
So what has changed as of now? The banks and other lenders are now required to write to millions of their customers informing them that they might have been mis-sold PPI, most important is the stipulation that the communication must be written in clear language and be jargon and complication free. It must also clearly state the time scales involved, in particular if there is a time limit involved in the making of a claim.
It is reckoned that the amount of compensation outstanding will well exceed the £1.9 billion paid out in 2011. Another staggering statistic is the FSA expect that there will be between four million and 12 million letters sent out.
Thank goodness for common sense prevailing in an industry used to making all its own rules at the expense of its customers.