PPI or payment protection insurance is here to stay despite reports that the Financial Ombudsman has finally halved the number of complaints from January to March 2014. So, we’ll have to anticipate the arrival of a million more cold calls and text messages from claims management firms.
The Financial Conduct Authority has verified the possibility of adding new rules for PPI claims after the court’s decision regarding the case of Susan Plevin versus Paragon Personal Finance. The supreme court decided that Plevin could get recompense because of the high commission her broker and lenders received during the time of transaction.
Before the ruling, mis sold PPI can be recompensed if it is proven the customer had insufficient information about the product before making a purchase. However, a consumer who found the insurance policy useful but had insufficient knowledge about the product before buying the policy cannot reclaim compensation.
The UK banking industry’s total of £26 billion for payment protection insurance compensation could become higher as a result. Barclays is slated to add an additional £300 million while Lloyds, the biggest mis seller of the policy, may add £1 billion, according to credit rating agency Standard & Poor’s.