Britain’s banks could be facing a new wave of claims for millions of pounds in mis-sold PPI if relatives of deceased policyholders make a claim.
A poll by Which? revealed that 90% of people surveyed had no idea they could make a claim for policies mis-sold to dead relatives.
Not widely known
The consumer champion says the opportunity to make such claims have always been there but told journalists it is not widely known and is ‘not in the banks’ interest to publicise it’.
Lara Keay from Mail Online said: “Experts tell the newspaper the banks have kept the right to compensation quiet so they wouldn’t be flooded with claims.
“But now it has been put under the spotlight, commentators believe they will be faced with thousands of refund requests.”
The Financial Conduct Authority (FCA) has said around 64 million PPI policies have been sold over the last three decades, but only around 20 million claims for mis-selling have been made so far, both successful and unsuccessful.
Many thousands of purchasers have died in the intervening, but if they were mis-sold their policy then compensation, plus interest is still due.
But the need to make a claim on behalf of a deceased relative is growing in urgency because we are now just one year away from the PPI claims deadline of August 29th 2019 after which no further claims can be made.
The claim process is identical to making a claim in your own name. The claimant does not have to be a blood relative but must be named as the legal representative in the deceased’s will. If there is no will a grant of letters of administration will be required before a claim can be made.
PPI was widely sold alongside all kinds of financial agreements like loans, credit cards, mortgages, store cards, overdrafts, car finance, catalogues and even finance to buy your three piece suite or television.
It was meant to help you make the payments on the agreement if you came out of work through accident, sickness or unemployment, but all too often it was sold to people who didn’t want it, didn’t need it or could never have used it.
But policies were mis-sold on an industrial scale when the vendors ignored the rules, sometimes even adding a policy to an agreement without telling the consumer.
Other ways it was done include:
- Leading customers to believe it had to be taken as part of the deal when it should have been completely optional
- Implying that the customer might get more favourable terms if the insurance was taken
- Failing to ask the consumer if they had any pre-existing medical conditions which would invalidate the policy
- Selling to someone who would never need to use the policy because they were covered in other ways like the sickness benefits for NHS workers, the police and the armed services
The UK banking industry has already paid out £31.9 billion in compensation for mis-sold policies and have set aside an estimated £46 billion according to the New City agenda think tank.
However, some experts believe the total payout could reach as high as £100 billion and the banks are bracing themselves for a rush of new complaints to beat the deadline.
Consumers who have spoken to Which? say they have found references to PPI policies in documents left behind by their loved one.
If there is no documentation, many of the banks offer a free PPI check which will establish whether or not PPI was ever attached to a credit agreement they took out.