Mis-Sold PPI Claims Straining Banks
As you know we are in some turbulent economic times. Banks are feeling the strain of this, with people unable to save as much and not willing to use loans for fear of unemployment, the banks are looking at extremely depleted reserves of cash to invest and spend. A viscous circle because when one of us do wish to secure a loan, the hurdles have been higher-ed because banks need to be sure that it can be re-payed. On top of all this banks are being swamped with PPI claims and mis sold mortgage claims, which is entirely of their own doing, but something that is affecting us all.
This means that banks are not making any money off of the interest rates. To add to all of this, they are seeing a stunning rise in the amount of PPI – or Payment Protection Insurance – claims in recent days, a rise that is almost putting many banks under.
There are two different types of claims that are being made. One of them is more damaging to the banks than the other, and it will be explored first. This type of claim is when people say that they were mis-sold their insurance policy and they want all of their money back.
The second type of claim is less damaging, but can still be hard for banks as they are running low on spare cash. These types of claims are from people who actually need to have the insurance money for the right purposes. They need help making the payments on their credit cards, loans, and mortgages. These will be explored second in further detail.
Claims For Mis-Sold PPI
These claims basically come about because banks were not very kind to their customers when they sold them the insurance. Many times, they told the customers that they had no choice, forcing them to pay for a policy that they did not want and did not need. These people now want to get all of their money back since the courts have ruled that what the banks did was illegal. The banks are obligated to refund all of the money that these people have been paying for years on end, so the sum is quite large.
Banks also mis-sold the policies through omission. They did not explain all of the rules. They did not tell people what the insurance could do or how much they had to pay for it. The terms and conditions were ignored. In some cases, the policies were even represented in a way that was not honest or true. This convinced people to buy policies that did not help them. It also forced them to pay for things that they would not otherwise have agreed to pay for, basically conning them out of their money.
Claims Where Legitimate PPI Claims Help Is Needed
On the other side of things, there are also more legitimate claims being filed. People are really struggling financially, and they are not always able to make their payments on time. They might not be able to make them at all. They are contacting the banks and asking for the help that was promised so that they do not incur interest and even greater debt.
While this does not hurt banks in the same way, it does mean that they need to pay out even more money. This is happening while they are not taking in as much as they used to, so it can be difficult