After Christmas, the PPI deadline will be just eight months away. As the August deadline gets closer, it’s likely that the banks will receive an influx of claims.
For those looking to try to beat the rush, submitting a PPI claim before Christmas could be advantageous.
The payout from a PPI claim can be substantial, and there are some great investments to be made from your compensation refund. Those feeling apprehensive about making a claim or who can’t be bothered to find the paperwork and deal with the bank can use the services of a reputable claims management company.
New regulations introduced in July mean that PPI claims companies cannot charge customers more than 20% (plus VAT) on successful claims. This is a welcome change, as many companies previously charged 35% or more. The best PPI claims companies have long charged below the 20% threshold. If you work with a claims company, always check PPI claims company reviews to find out about the experiences of previous customers.
The banks and PPI claim companies are gearing up for a busy 2019 and looking towards the future after the deadline.
The Banks Will Pay Consumers after the Deadline
Some of the banks have paid huge fees to customers for mis-selling the insurance. To date, over £32 billion has been refunded to customers. Lloyds Banking Group is the worst offender, paying nearly £20 billion for its mis-sold PPI policies.
Although 29th August is the deadline for consumers to contact their bank, this is not the final day that the banks will be dealing with claims. It will take another couple of months (if not longer) for the banks to resolve all of the complaints.
The Financial Ombudsman Service (FOS) also has a long queue of complaints to resolve. Seven out of ten claims to the FOS are regarding PPI. This means the banks could still be issuing refunds into early 2020.
Despite paying out huge sums of money, many banks are still making profits. However, some have gained a bad reputation for their responses to PPI claims. Barclays chairman John McFarlane said PPI claims turned portions of Britons into fraudsters, with many making fake claims. Consumer rights groups and Martin Lewis of Money Saving Expert called the claims ridiculous, noting that despite nearly £50 billion’s worth of PPI claims being mis-sold, no banker has been convicted of fraud.
Claims Companies Looking beyond August
Much like the banks, PPI claims companies will still be working with clients after the deadline. However, they won’t be able to process any new PPI claims. Instead, these companies will need to target a new area of claims. There are many different types of claim that companies could go into, such as personal injury, payday loans or another financial product (including mortgages or packaged bank accounts). While none of these are as profitable as PPI, the companies’ expertise in claims handling could easily be transferred.
However, as of April 2019, the Financial Conduct Authority (FCA) is taking over the regulation of these firms. With the takeover comes stricter guidelines and rules that claims companies must adhere to. This should result in only the very best claims companies continuing to operate.
If you still need to make your PPI claim, start soon so that you don’t miss your opportunity before the 2019 deadline. You might be surprised by just how much you receive from any mis-sold policies.
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