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PPI Compensation bill set to double, says FSA

Posted 6th April 2010.

The FSA is expecting complaints to double from its original estimate of 158,000 to 450,000 each year about the controversial misselling of Payment Protection Insurance (PPI).
PPI has captured the headlines recently as consumers have been mis-sold the insurance by being advised No PPI, No Loan or in some cases the PPI has been added without the consent of the customer.
One particular case of a cancer victim being sold PPI with a secured loan when he could not claim on the policy, highlights another misselling scandal.
The cost of settling these complaints is up from the expected figure of £80m to as much as £203m per year.
Concerns over the miss-selling of PPI have been highlighted by the recent fines handed out to 22 firms by the FSA, the largest area of concern being PPI sold alongside unsecured personal loans, with fines of £8,925,000 being handed out.
Consumers who have PPI can find that there overall borrowing is considerably higher than what they thought, as the insurance attracts interest at a rate of approx 8%. Consumers who have been mis-sold can reclaim a refund of all payments plus interest, the average amount refunded is around £2,000.

Douglas Covey & Co are a no win no fee firm based at Belfast Business Centre, Simon Green claims Manager says consumers should be wary of paying upfront monies to any companies offering to wipe out debt or to recover PPI"