PPI has made the national headlines yet again. This time there looks as though there is going to be some retribution for all the millions of people who lost out through being mis-sold PPI, as Lloyds Bank are ordering directors to repay bonuses because of the mis-selling of this insurance. Great news as where they have gone, others will be sure to follow.
It is important to realise that the idea behind PPI is very sound. Here is an insurance which will help people who have had to borrow money for a purchase; the amounts can vary from a few hundred to many thousands of pounds. Should these borrowers then find themselves unable to make repayments for a variety of unforeseen reasons, then the insurance would help out with this. This is a well-thought out strategy. The problem is that it was badly handled by banks, lenders, credit card organisers and financial agencies. They saw this as an opportunity to make a killing from unsuspecting customers, and their unprincipled attempts to profit from this are well documented.
In June 2011 there was a High Court Judicial Review which came down in favour of borrowers and the large banks such as Lloyds, RBS and HSBC decided to throw in the towel and not to resist looking at compensation for their borrowers. Unsurprisingly other smaller institutions all followed suit. This landmark case opened the floodgates for claims from members of the public. Also unsurprising is the delays and obstruction put in place by the aforementioned institutions to hamper the payment of compensation. This is now being addressed.
Did you realise that PPI is still available? The answer which I am sure will amaze the majority is that yes it is. Many large institutions believe that it this whole subject is so toxic they will not handle it. It must be a difficult insurance to sell, however consumers should be aware that stringent rules have been put in place by the FSA to protect borrowers interests. At the same time the Competition Commission is to introduce new rules about being able to sell PPI at the point of purchase.
For many thousands of consumers making relatively minor purchases which require moderate lending properly sold PPI could be a lifeline at this uncertain time. So it is right that PPI should be alive and kicking.