The major banks are setting aside even more money to pay customers who were mis-sold Payment Protection Insurance.
In 2014, both HSBC and RBS said they underestimated the continuing number of claims. RBS set aside another £650 million in 2014, taking its total to £3.7 billion. And the UK’s biggest bank HSBC has set aside a total of £2.8 billion, including an extra £640 million for 2014.
Other banks will be reporting soon and similar increases are expected from them. More than £25 billion has now been set aside to compensate customers for the systematic mis-selling which occurred for more than a decade before it was stopped in 2011. Money is being paid out currently at the rate of more than £300 million every month.
You may have taken out PPI without realising
The average pay-out is around £1700, but only around half of those affected have yet claimed. If you took out a loan or a credit card any time before April 2011, you probably did pay for PPI, perhaps without realising it.
This so-called insurance was supposed to pay out if you could not meet your repayments due to unemployment or ill health. But it was widely mis-sold to people who could not claim and the stringent conditions were not clearly explained. In some cases, people were led to believe taking the insurance was compulsory when it was not. HSBC admitted this week it made 76% profit on the sales.
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Your bank can check if you were sold PPI for you
So it is worth thinking back to the loans and credit cards you took out in the last 15 years and making a claim for a PPI refund from any card provider or bank you used. Check their websites about how to claim. You almost certainly will not have any documents after all this time but the banks and card providers have to check your details themselves.
You can get guidance and standard claims letters from the consumer organisation Which?. In addition, the Financial Ombudsman will also help.
Visit our Money section for money-saving tips, pension news and guides.
Avoid claims management companies
Although the vast majority of claims are successful, if you are turned down, it is worth persisting and, if that fails, going to the Ombudsman. Its latest figures show it upheld nearly six out of ten rejected PPI claims in the last six months.
It is never worth using a claims management company which will be no more successful than you would be by yourself but will take about 40% of your payment.
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