How To Avoid Being A PPI Victim A Second Time

If you haven’t already started your PPI claims, it could turn out to be to your advantage.

With millions of claims already settled, it now transpires that at least 2.5 million recipients of those settled claims may have been short-changed. Worse yet, some of them have had legitimate claims outright rejected.

One expert commissioned by the BBC estimates the total amount of short-changing to be £1 billion. How can this degree of compensation shortfall happen on such an enormous scale?

The Cumulative Effect of Fees and Charges

As part of the PPI claims process, banks are required to take into account any fees and charges that were accrued during the term of the loan, but it seems this hasn’t been done in the manner that is required by regulators.

Claims regulators require that banks capture the cumulative effect of fees and charges and factor that into their calculations, ensuring that its victims receive full restitution. But in far too many cases, this doesn’t appear to have been happening.

Unsurprisingly, all the banks concerned declined an invitation to be interviewed on how their compensation calculations work and why they are not fully including the effect of fees and charges, as is required by regulators.

Protect Your Claims From Sub Standard Processing

While it would be nice to think that this is no longer happening, it would be unwise to make that assumption. To protect yourself from falling victim to your bank for a second time, the wisest thing you can do is to get a PPI calculation before you submit your claim.

That way you’ll have a good idea of how much you can expect to be offered by your bank when it comes time to receive your payout. If the offer you receive from your bank is considerably less than what you know you are owed, you will be able to challenge them to correct their offer to the true amount.

While it’s possible to do the calculations yourself, it’s worth keeping in mind that there are several variables involved, which makes it easy to miss an important point in the calculation process and produce an incorrect figure.

The safest bet is to use a PPI claims company, which will take your full loan history and relevant data and produce a reliable figure which you can then use to compare against the offer you receive from your bank.

If your bank still refuses to play fair with you, you know you will have a strong case to take to the Financial Ombudsman Service (FOS) for independent adjudication. The chances of the FOS finding in your favour are quite favourable, with upholding rates in favour of the claimant still as high as 68%.