High street banks and lending companies are now in big trouble due to mis-sold PPI complaints filed by their customers against them. The Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) have been fining some of these financial firms once they prove that they mis-sold PPI to their customers.
Figures from the FSA showed that around 9% of the insurance policies would ever pay out when a client tried to make a claim for their mis-sold PPI policy if needed, like when they were sick or loss their employment and cannot meet their monthly loan repayments. Numerous clauses within the terms and conditions prevented PPI policies from paying out when a policyholder became sick or unemployed. These exclusions made the policy mis-sold to millions of policyholders.
Payment protection insurance has been sold by the lenders and banks at a very expensive cost and the customers could in fact purchase this cover at a cheaper price from alternative sources than their loan provider. Thousands of people are not aware that PPI cost has been added to their loan or credit card and the cost usually runs into thousands of pounds. This could be the expensive mistake of the customers and unfair practice by the financial firms and their representatives.