New PPI compensation claims are expected to increase twofold over the next 12 months state the FSCS (Financial Services Compensation Scheme). Payment protection Insurance claims have originated from the mis selling of payment protection insurance over the past few years.
Payment Protection insurance (PPI) is offered to cover loan and mortgage payments in the event that if you either lose your employment, contract a serious disease or have a major accident. However many of the schemes have failed to payout promptly on these occurrences due to terms and conditions clearly not stated at the time of sale, and have been mis sold as a result.
This mis selling has resulted in multiple claims to the FSCE for compensation from irate customers that amounted to over 20 million pounds last year, and is predicted to rise to 40 million next year.
THE FSCS is the government body responsible for making payouts to customers whose firms are no longer trading, and it is unclear whether it sees the increase in claims as due to a general increase in claims, or an increase in the amount of financial firms ceasing to trade.
The Chief Executive of the FSCS, Loretta Minghella said: “The FSCS will continue to play a central role in promoting consumer confidence in 2010/11 by paying compensation when firms fail.
“Payment protection insurance claims will be an key driver of our business next year and will add to significant costs estimated at 50.5m”
“Though the situation is in flux, our current assumption is that approximately 8,000 PPI claims will come in during the next financial year. That’s almost double the current number.
She continues in a vein which shows her main priority is to protect the consumer and not the industry.”In such tough economic times, we recognise that the interim and annual levies will be unwelcome news for firms. We take great care in determining our indicative levies though our primary obligation is to deliver compensation to those entitled to our protection,
Want to find out more about PPI Claims, then visit Dons LLP site on how to choose the best Mis Sold Payment Protection Insurance for your needs.