The claims came from customers who said they were mis-sold Payment Protection Insurance (PPI), which was supposed to cover loan repayments if the borrower could not pay them. It often did not do that and was widely mis-sold to people who could never have made a claim. Even when it was not mis-sold it was very over-priced.
The loan providers have been forced to reopen these cases by the regulator – the Financial Conduct Authority (FCA) – after it reviewed cases from 2012 and 2013. The FCA believes many had been wrongly assessed.
Letters will be sent out
The FCA also confirmed that more than three million people in high risk categories had been invited to claim redress and another two million letters would be sent out in the coming months. If you get one, always respond and put in a claim. Your chances of success will be very high.
The banks will not, though, be writing to the two and half million people whose case may have been wrongly decided, unless the review finds that there were errors and the customer is owed money. So anyone who was turned down or thinks they were paid too little, especially if that happened in 2012 or 2013, should contact the bank or card provider and ask for their case to be reviewed explaining why it was wrong.
If the decision was received in the last six months you can appeal direct to the Financial Ombudsman Service, which upholds nearly two out of three PPI cases in favour of the customer.
Don't miss out
Anyone who was sold PPI and has not claimed compensation should do so. They will get their premiums refunded in full and interest at 8% since they were paid. The typical payment to an individual is between £2000 and £3000. Many get more. In the first six months of this year compensation was being paid at the rate of £375 million per month.
So far the banks and others providers have paid out £16 billion in redress and have set aside nearly another £9 billion for future claims.
So why not claim yours? If you took out a loan or credit card before April 2011 you probably did pay PPI even if you did not realise it.
You can find out how to claim or appeal at the Financial Ombudsman website which has a lot of useful information.
The opinions expressed are those of the author and are not held by Saga unless specifically stated.
The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.