Credit Cards and the Effects of a Mis Sold PPI

Payment protection insurance is the biggest financial scandal in the United Kingdom and clearly, banks made a huge profit if the bill is reaching £20 billion, roughly the price of two London Olympics in one year. PPI could be sold on your loan, mortgage or credit card.

If you were mis sold PPI on credit cards, the higher your credit limit, the higher the premium you are paying for the insurance. The same is also true if your credit card has a higher interest rate.

A mis sold PPI could possibly increase your interest rate. Bank employees may not inform you that you were issued an insurance policy for your credit card. Instead, the item would be listed with the descriptors “security”, “protection” or ASU protection.

In some cases, mis sold PPI is not listed as an item on your bank bills and instead, your monthly repayment or your interest rates increase. This is a compound interest rate and resolving this matter can be quite complicated as your loan repayments are tangled with your insurance repayments.

Mis sold PPI could give you an average of £3000 in refunds, but you could be owed more due to your compound interest rates. It would be wise to consult with a PPI claims management company to help you successfully reclaim your refunds.

Why Are Some Banks Not Paying Up for Mis Sold PPI Claims

PPI’s complete UK compensation package had increased to £25 billion in 2013 from its starting £9 billion in compensation, but still, banks are rejecting majority of PPI claims coming from customers or their PPI claim company thinking that they are fraudulent or lacking evidence. The Financial Ombudsman actually found that in 2011-2012, three quarters of the claims rejected by banks are in favour of customers, indicating that banks are not willing to pay up for their sins.

Chief Ombudsman of the FOS Natalie Ceeney explained the situation that the FOS is admittedly dealing with one of the biggest clean-ups in the UK’s financial services history. The Ombudsman is the last department for obtaining justice for customers since they have legally binding powers that allow them to have the banks do as they decide.

Even if banks are not paying up, they have different responses to the large quantity of legitimate PPI claims coming into banks.

Barclays said that it is committed to resolving all PPI claims quickly and effectively. They have effectively reduced the time it takes to process the claims. They continually blame Claims Management Companies for clogging the system with fraudulent claims.

Lloyds said that PPI claims relate to historic processes and procedures and that the FOS numbers do not show the same progress in other areas of the claiming process. They said they had issues in distributing PPI compensation payments to customers in the last half of the previous year.