Total payout climbs ever higher
The total amount payout out by the UK banking industry for mis-sold payment protection insurance rises ever higher.
Latest figures from the Financial Conduct Authority (FCA) show the £286.4 million paid out in February took the grand total to £34.4 billion paid since January 2011.
PPI has grown into possibly the biggest ever financial scandal seen in Britain.
Even 10 years after the first alarm bells started to ring about mis-selling, PPI remains the most complained about financial product dealt with by the FCA whose figures showed there were 3.3 million new complaints during 2018 and PPI still forms 40% of their workload.
More than 60% of PPI complaints were upheld in 2018 and the average amount of compensation for a single claim was £1,886.
Could the taxman owe you money on your PPI claim?
It has emerged that the income tax deducted by lenders from the overall compensation for a successful PPI claim can be reclaimed by thoussands of people who were completely unaware.
A change in the personal savings allowance in 2016 allowed taxpayers to earn up to 1,000 a year interest on their savings which includes the statutory interest paid on PPI claims.
Amounts which can be reclaimed vary. Someone receiving a £1,000 payout on PPI taken out three years ago could be owed £40*, but if you got back £3,000 on a policy taken out 10 years ago your tax refund could be £300*.
A refund of £15,000 on a policy taken out 10 years ago could get you back £1,470*
(* all figures are based on estimates and not full calculations).
The bad news is that if you are a taxpayer you can only go back four years, but if you were a non-taxpayer there is no restriction on how far you can go back.
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Big money paid out on single claims
The latest FCA figures have set the average payout for a single successful claim at £1,886, but many successful claimants end up with much more than that.
Gladstone Brookes’ Top 20 payouts for March added up to more than half a million pounds – £562,430.30±. Third on the list was a lady with a single claim on a JD Williams catalogue account who got back £36,164.29±. Another lady received £26,314.31± for her JD Williams claim.
Six of the remaining seven single policies were all credit card accounts. Clydesdale/Yorkshire paid out £33,425.32± and there were two successful claims against Halifax for £27,934.01± and £25,611.16± (± All redress amounts quoted are prior to fees and taxes)
The way PPI is charged on credit cards, store cards and catalogue accounts differs from the one-off calculation on a loan.
The premiums payable on a loan are calculated at the point of sale and don’t vary, but card and catalogue payments are calculated monthly and are based on the residual balance on the account.
If you have held the account for a long time and maintained a big balance then the amount of redress payable if it is found the policy was mis-sold could run into many thousands.
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The PPI claims deadline of August 29th draws ever closer, but there are two groups of possible claimants who are only just realising they too could be owed compensation for mis-sold insurance.
First there are the relatives of people who have passed away but were potentially mis-sold PPI in their lifetime and second are ex-pats now living all over the world who could have had PPI mis-sold to them before they emigrated.
Mis-selling PPI is a historic offence which means it occurred at the point of sale whatever has happened since then does not change the fact that the offence was committed and therefore compensation should be payable.
A recent survey by consumer champion Which? found that 90% of the people they spoke to were completely unaware they could make a claim for a relative who has passed away.
The only qualification for doing so is that you are acting on behalf of a deceased person in accordance with their will.
If there is no will then you will need a copy of the grant of letters of administration before the lender will deal with you.
Ex-pats may have completely forgotten that they took on PPI or even be aware it was added to their financial agreement without their knowledge.
According to the United Nations, more than 1.3 million people born in Britain now live outside the country with an estimated 900,000 being long term residents in other EU countries.
The other 400,000 are scattered across the world – from Canada and America to the Middle East and Indian sub-continent and all the way to Australia and New Zealand.
Claims are made in exactly the same way as someone still resident in the UK. If they took out a loan, credit card, mortgage, overdraft, store card or catalogue any time between 1988 and 2011 there is a chance that PPI was attached to the agreement.
To make a claim from even as far away as Australia a consumer needs to contact their lender to establish whether or not PPI was attached to any agreement to establish a potential claim which can be done by requesting a Free PPI Check through Gladstone Brookes.
Documentation for any agreement is the best way of establishing whether or not PPI was present, but if you haven’t kept the paperwork don’t despair because new rules enable an inquiry to be made of any lender to see if PPI was attached to any agreement in the past.
Once the existence of a policy has been established a decision can be made as to whether or not it was mis-sold.
Want to know more about the PPI Deadline? Visit our Deadline Page here