Many consumers have no idea they were mis-sold the insurance policy firsthand.
During the 90s up to the year 2007, bank employees recommended that loan-applying consumers purchase payment protection insurance policies.
They presented the policies as ‘crucial’ for loan application success given that a PPI removes the risk of the consumer’s inability to pay during his or her sickness, unemployment or accident stages in life.
But PPI’s provisions are not general. As with any other insurance policy PPI is designed for specific and eligible individuals. Bank employees removed the right of consumers to choose a PPI company of their own choice.
About 50% of the UK population think they may be mis-sold PPI. The reluctance of the banking industry to help resolve consumer issues quickly had further made it difficult to ascertain whether a consumer has payment protection insurance policies.
The huge income of claims to banks and the Financial Ombudsman Service is no fault of the claims company who only processes the claims to find out if it was truly mis-sold. The Financial Conduct Authority had once called on banks to call consumers who were mis-sold PPI based on their records — this responsibility they shunned that could have avoided their current troubles.
The FCA-imposed PPI claim deadline is unfair to consumers but banks will suffer huge losses by June 2019 because PPI is still on the rise due to their own fault.