New figures released by the Financial Services Authority (FSA) show that complaints made in the second half of 2010 about payment protection insurance increased by 63%. Here we take a look at the mis-selling of payment protection insurance (PPI).
The last six months of 2010 saw 434,596 complaints made about payment protection insurance, up from 266,685 in the first half of 2010.
In comparison, the last six months of 2009 saw just 174,286 complaints made about PPI.
PPI is usually sold as an add-on to a loan, credit card, mortgage (MPPI) or overdraft agreement.Â The borrower is not obliged to take out PPI so the provider cannot add it on to the loan agreement without your knowledge. However, many people are currently paying PPI without even knowing it.
Claims for the mis-selling of payment protection insurance are likely to keep rising over the next few years, a leading insurance specialist has warned.Â Payment Protection Insurance has been a controversial insurance product for a number of years, with mis-selling rife among many intermediaries.
British banks could owe as much as Â£3 or Â£4 billion to consumers who have been mis-sold insurance over the last 10 years. A leading expert is warning that PPI mis-selling cases are set to rise considerably in the future.
Speaking to an All Party Parliamentary Group on insurance, Steve White, Head of Compliance and Training at The British Insurance Brokers Association (BIBA), argued that there was always a delay between complaints and compensation.
“History shows there is around a two-year delay in complaint activity and compensation demands, so it is clear that PPI compensation is going to keep rising for the next few years,” he is reported to have said by Money Marketing.
One of the biggest grievances made against PPI is that many sellers led consumers to believe that it was compulsory to take out payment protection insurance when applying for a loan, mortgage or credit card.
Remember, PPI is always optional, it is never compulsory, If you were told that you had to take out Payment Protection Insurance then this is wrong and you will be liable to receive compensation.
If you think you were mis-sold PPI you may be entitled to reclaim compensation.