Payment Protection Insurance

The Payment Protection Insurance scandal has been littered across the tabloids in recent months as the banks have come under scrutiny for the excessive and unfair charges it has offloaded onto its customers. The most notable of which being PPI. Over the past two years a number of high street lenders and GE Capitol Bank have been fined by the Financial Services Authority for failings relating to the mis-selling of PPI. These fines ranging from £17,500 to £1,085,000 have proven the PPI market had seriously harmed the interests of consumers. The unfair and sometimes not required charges of PPI have seen profits rage into the billions for banks and lenders. The ratio of insurance payouts in respect of PPI claims was confirmed by findings of the Competitions Commission in June 2008 with Mortgage PPI at 28%, Personal Loan PPI at 15% and Credit Card PPI at 11%.

To simplify these findings banks and credit card companies are having to payout £28, £15 and £11 for every £100 they take on PPI cover. This results in astronomical profits considering the volume of PPI cases in the UK. If you have had a loan, mortgage or credit/store card over the past 6 years it is advisable to find out if you had PPI cover as you could be entitled to reclaim £1000s in unfair bank charges if the policy was mis-sold to you.