Banks in Britain are currently trying to lobby the Financial Services Authority (FSA) to impose a deadline on customers making claims for compensation after being mis-sold payment protection insurance (PPI). So, are PPI claims likely to end in 2014 as the banks want them to? If so, what should you do?
The proposed PPI deadline
The discussions about a potential time limit on how long banks will be expected to continue compensating PPI mis-selling claims, have taken place between the British Bankers’ Association (BBA) and the FSA. This raises the prospect that the time to claim PPI compensation could be coming to an end. This will act as a wake up call to those who have been thinking about claiming PPI money, but who are yet to apply.
At the time of writing, there is no overall deadline on claiming PPI. Despite the fact that there are currently limits that stipulate that you must claim PPI within six years of taking out the loan associated with it, most people are still successful with claims relating to older loans. This is because any claim can be made up to three years after becoming aware that you can claim. Recently the big banks have started writing to customers to make them aware of the PPI scandal, which will make it easier for them to argue the three year ‘awareness’ time limit in the future.
So, are PPI claims likely to end in 2014?
The press have likened the requests to end PPI claims by early 2014 to allowing criminals to choose their own punishment. The FSA appears to be opposing the idea that the banks will be able to choose when the claims can end.
The FSA has said that it will listen to consumers before it makes any decision. There are even press reports that the banks themselves are starting to worry about the bad publicity and the likely deluge of claims that will follow an announcement of a PPI deadline.
Gillian Guy, the Chief Executive of Citizens Advice, said that, “For years PPI was mis-sold to people who either couldn’t use or didn’t even ask for it in the first place. A deadline could only be fair if, in exchange, the banks contact every customer who was sold PPI to tell them they may be entitled to make a claim.”
This all seems to mean that the banks’ request to end PPI claims within the next year is optimistic, however, we have seen that the banking industry is treated very differently to others when it comes to some matters. Compensation for mis-selling PPI could ultimately cost banks around £40bn, so they are desperate to put a lid on the scandal.
How should I claim PPI?
It is still important that you apply for any PPI compensation that you believe that you are owed as soon as possible. It is likely that even if the spring 2014 deadline is turned down, the banks will launch a publicity campaign to ensure that all their customers are aware of the situation. Under the current rules that will mean that PPI compensation claimants would be likely to have until some time during 2016 to complete the claim procedure. This may sound like a long time, but it can take many months to get compensated. If there is a rush of more claimants it could take even longer to make a successful claim, so it is well worth starting the process immediately.
Claiming compensation for mis-sold PPI is something that you can do yourself. All the advice you need is out there on the internet already, there is no need to get a claims management company involved. A great place to start researching PPI mis-selling is Martin Lewis’ Moneysavingexpert.co.uk or the Citizens Advice website.