PPI mis-selling results in compensation of millions for consumers

Consumers in the UK have won back millions of pounds from banks and insurance companies as a result of being mis-sold insurance or becoming victims of administrative errors. According to figures the total amount won back by consumers who were mis-sold insurance or experienced errors in the last six months of last year was £284 million.

The reports show that the majority of these cases related to consumers that had been sold payment protection insurance, also known as PPI. This was a type of insurance sold alongside credit such as loans and credit cards, but came under fire several years ago after investigations found that it was being widely mis-sold by many providers of financial products and services.

The Financial Services Authority, the UK’s financial regulator, made these figures public recently, and also revealed that banks had received over 1.1 million complaints relating to unauthorised overdraft charges. Banks are now dealing with a huge backlog of these complaints following the removal of a ban on addressing the complaints, which were frozen as the bank charge case went through the High Court and then the Supreme Court.

Banks and insurance firms were said to have received 2.7 million complaints between July and December of last year, which compared to 1.6 million in the six months previous. The figures also showed that of these 45 percent were upheld in favour of the consumer.

The Financial Services Authority has, in the meantime, said that it will be coming down hard on banks that are found to be failing to deal with customer complaints effectively, and has warned that there are some banks that are trying to force customers to buy financial products that they do not want or need to shore up their own finances.

Tags: finance, bank, Financial institutions, financial products, Insurance