The PPI Claims Deadline: Who Does it Affect?

The PPI deadline is now just ten months away. The Financial Conduct Authority’s deadline of 29th August 2019 is encouraging those who have not yet made a claim to do so before the cutoff date. Since 2011, the banks have paid over £32 billion to consumers for mis-sold Payment Protection Insurance (PPI). PPI was commonly mis-sold alongside credit cards, loans and mortgages — but, many were not sold in the correct way.

Consumers, the banks and reputable PPI claims companies are preparing for the deadline and the impact it will have. Will consumers stop being harassed by cold calls? Or will the banks find another way to get more money from customers for unnecessary products? Below, we look at what the deadline means for various individuals and organisations.

The Impact of the Deadline for Consumers

For many UK consumers, PPI is often linked with receiving cold calls and seeing a plethora of adverts from claims companies. Despite these negative connotations, once the facts are received, many individuals become aware that they are owed a great deal of money. Some even find themselves receiving four-figure sums from lenders on multiple policies.

The deadline puts pressure on consumers to identify mis-sold PPI and make their claim. Some believe that the deadline is detrimental to consumers and should not be imposed, allowing people to make a claim whenever they identify mis-sold PPI.

End of the Road for PPI Claims Companies?

The deadline will have a great impact on those companies currently handling PPI claims. Many companies emerged when the scale of the mis-selling scandal came to light. However, this was to the detriment of honest consumers. Many customers used the services of companies who would take large fees for claims, demand money upfront and not achieve results.

Since this time, the government has imposed new regulations for claims companies. This means all companies must operate on a no win, no fee basis. All registered PPI claims company can be found on the regulator’s website for consumer’s to check before handling their case. Reputable PPI claims companies will need another claims market to turn to once the deadline is imposed.

Good News for the Banks?

The banks will be happy when the deadline arrives as it allows them to finally stop setting aside money for PPI claims. The staggering figure paid to consumers keeps increasing.

Lloyds Banking Group has repaid the most, totalling nearly £20 billion to consumers. Despite this large sum of money, the Banking Group has reported an increase in profits. Other banks, however, are suffering from the mass of PPI claims. Barclays has been in the news regarding its PPI claims. The bank wrongly told some customers they did not have a case for PPI, when in fact they did. Barclays chairman, John McFarlane, recently spoke out about how he believed that PPI claims had turned consumers into fraudsters, with many making fake complaints.

Will the banks learn its lesson after the mis-selling scandal is over? There are predictions for “the next PPI scandal” to emerge. But, not all the fingers are pointing at the banks. Some predictions for another mis-selling scandal believe it will about payday loans, pension plans, privacy and GDPR or leasehold agreements.

In the next ten months, however, consumers need to get moving with their claims and PPI claims companies need to make sure the demand can be matched.

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