November Pays Out Record PPI Compensation Sums
It has been revealed that the compensation paid out to missold Payment Protection Insurance (PPI) victims during November was the highest that it has ever been. Whilst October saw £268m paid out in claim amounts, the figure grew a month later to total £379m.
Over the past decade, PPI was sold alongside credit agreements as a way to help people pay their financial commitments should they lose their income. However, missold PPI was commonplace, with banks telling individuals it was compulsory, selling consumers insurance that was not right for their needs, or tacking on policies and not even telling people about them.
After the scandal came into the public eye, the financial industry estimated that around £9bn would have to be paid back, with consumers able to gain full premium repayments with an additional eight per cent compensation sum.
For the final three months of 2011, it was revealed that the Financial Ombudsman Service (FOS) saw a 10 per cent rise in complaints compared to the previous quarter. With a rising number of claims, the number of payouts also increased, with November seeing a record peak for money that was paid out. However, many more claims continue to pour in, and with Financial Services Authority (FSA) guidelines having changed in 2012 so that institutions have to deal with claims in just eight weeks, figures for December and the beginning of this year are likely to be even higher.