The ongoing saga of payment protection insurance (PPI) in Britain continues to roll on and claim fresh victims, with many financial institutions suffering enormous losses and putting aside huge new sums to cover future claims.
The latest casualty in one of the biggest financial scandals to ever occur in this country is Lloyds Banking Group, which has now reported a total PPI cost to date of a staggering £18.1 billion. This includes a newly set aside sum of £1.6 billion to deal with PPI refunds and compensation, ahead of a two-year deadline on such claims that starts ticking down from this month.
The beleaguered bank says it is struggling to cope with an avalanche of PPI claims and is receiving as many as 9,000 every week. Many of these come via specialist firms using claims software to deal with high volumes of caseloads and are favoured among consumers who might not otherwise know how to make their claims, or have the time to do so.
Mis-Sale of the Century :
Lloyds is hardly alone in its PPI financial woes. It is joined by several of the other big banks in stashing away cash to cover new claims and that lowers profits, if any, as a result. Barclays has announced a £1.4 billion loss due to PPI and is setting aside an additional £700 million to deal with upcoming claims. Credit card firm Capital One has also swung to a loss over PPI, reporting it was in the red for 2016 to the tune of £45.4 million as it squirreled away funds for future PPI payouts.
How PPI has gone so very wrong for so many financial institutions. The opposite was supposed to have happened: banks and others, such as mortgage providers and vehicle finance firms, sold PPI along with their products as a way to protect them in the case account holders were unable to make repayments. This could happen if they became redundant, ill, injured or died. So it was meant to be a win-win for both sides.
The problem was that PPI was pushed onto tens of millions of consumers (around 34 million is the estimate) as the financial firms saw it was an easy way to make enormous sums of money. That ended up with some consumers either not knowing they had PPI with their accounts, and were paying for it, or who were befuddled and thought they had no choice but to accept it as part of a loan, vehicle financing or credit card.
PPI Claims, Driven by Claims Software :
So large has the PPI claims sector become that the biggest claims firms operating in the UK today have no option but to automate their processes using claims software as the only way of getting through the gargantuan caseloads. To date, £27.1 billion has been paid out in refunds and compensation — and it’s all about to get even larger, if recent developments are anything to go by. Those claims firms using claims software are able to almost effortlessly speed up the entire process and get compensation for their clients as swiftly as possible.
And because there are only two years left to claim PPI from August this year — a deadline set by the Financial Conduct Authority (FCA) earlier this year — there’s a rush on. Consumers who don’t know anything about it and haven’t much of an idea about PPI are about to get a large-scale wake-up call.
That’s coming in the form of a massive advertising campaign organised by the FCA and paid for by the banks. It’s coming to a TV, radio, webpage and everywhere in the media near you very soon.
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