The UK’s finance watchdog has reached out to one of Hollywood’s big-name action stars to bring home the message that a countdown is underway for making claims for payment protection insurance (PPI). If people keep dithering and don’t act fast, they may lose out on refunds or compensation in what amounts to the biggest financial scandal to ever hit Britain.
While Arnold Schwarzenegger did not have to come to the UK to film the £42 million TV ad — paid for by 18 banks and other financial institutions that mis-sold PPI — he appears on the small screen as an animatronic figure on tiny tank tracks. His diminutive, toy-like appearance does not prevent the thundering hero of such action-packed films as Terminator and Total Recall from blasting viewers to “come on!” and make a PPI claim if they’ve been mis-sold the controversial product.
PPI was designed to cover repayments for a range of financial products — from unsecured loans to car financing, mortgages, credit cards and more — in the event the account holder became ill, lost their job or even died. If any of these happened, PPI would kick in and make the repayments instead. While in principle there was never anything wrong with PPI as a financial instrument, it transpired that a major difficulty arose in how it was sold — usually forcefully — and the massive amount of commission the banks and others earned from it.
Forced on the public
Complaints from the public in recent years spoke of people being pressured into paying for because they felt it was part of the application process for their mortgage, loan or another product from their bank. If they declined PPI, they felt they would not be approved for the financial product they wanted. Other people have spoken of not even being aware that they had PPI, but were nonetheless being charged for it.
All this has resulted in the massive collective sum of £27.7 billion being paid out to the public in PPI refunds and compensation since January 2011. The average payout has been just under £3,000, and now with the FCA’s deadline of August 2019 for making claims and the banks putting aside billions more to cover future claims, a lot more is expected to come.
People who want to make a PPI complaint are entitled to do it themselves and make their own claim. But the reality is that most people prefer to use the expertise and contacts of a claims management company. Almost all of these do not charge people up-front fees, instead taking a percentage of a payout sum. The top claims companies will use such advantageous tools as claims software to quickly slice through high caseloads and get people their money as soon as possible.
A PPI sell-out
It’s believed that some 64 million PPI policies were sold by the big banks, credit card firms and other financial providers. So far, though, only 12 million successful claims have been made. An additional 4 million have been rejected, and the banks have earmarked some £37 billion in additional funds for PPI claims over the next two years.
Speaking at the launch of the new PPI ad campaign, the FCA’s chief executive, Andrew Bailey, said the ultimate goal was to benefit not only the public in prodding them to make a claim, but to bring about an end to the entire PPI saga that has rolled on for years and tarnished the UK financial sector’s reputation.
“Our campaign aims to cut through the noise on PPI. We want to encourage people to decide whether to find out if they had PPI and whether to complain or not. Our message, and Arnie’s, is ‘do it now’ and I urge people to make a decision before the deadline on 29 August 2019,” he says.