The countdown is on for the PPI deadline. Are the banks, PPI claims companies and consumers ready?
There is less than nine months until the PPI deadline. The Financial Conduct Authority (FCA) has set 29th August 2019 as the official deadline for consumers to contact their bank regarding any mis-sold PPI policies. The FCA reports that the advertising campaign for the deadline has worked well, with more money being paid to consumers since the announcement of the deadline. It hopes that the deadline will encourage those who have not yet claimed to take action.
But with Christmas now just two weeks away, the banks will likely see a dip in the number of claims made as individuals prepare for the big day and spend time with their families. After Christmas, however, the countdown will be on until August. The closer the deadline gets, no doubt the more people who will realise the urgency of processing their claim.
To date, the banks have collectively paid £32 billion to consumers. It’s expected that the total will reach £40 billion before the cut-off date. Over 60 million PPI policies were sold in the UK, which means that many individuals have more than one policy.
After the case of Mrs Plevin, even more people can make a PPI claim based on high levels of commission on a policy. Consumers can now make a PPI claim if over 50% of their PPI policy was a commission, which has allowed thousands more people to make a claim.
PPI Claims Companies and the Banks Prepare for 2019
PPI claims companies are gearing up for a busy 2019, as they are eager to process as many claims as possible. These companies are facing their own deadline, as after August, they will no longer be able to handle PPI claims. Even the best PPI claims companies will need to plan what to do after the deadline. There are a handful of other types of claims that these companies can take on, for example, flight delay claims or payday loans, with the latter increasing significantly and even causing the collapse of Wonga into administration.
Thankfully, to handle a large volume of claims, the best PPI claims companies use effective claims management software. This enables customers to be automatically updated about their cases. For companies, checking the progress of a claim and chasing up with the bank is made significantly easier.
The banks will be bracing themselves for a busy 2019. PPI claims have impacted Lloyds Banking Group the most. In the first half of the year, nearly 20,000 complaints to the Financial Ombudsman service (FOS) were about Lloyds. The bank is no doubt preparing for a busy eight months as it aims to resolve all claims and hopefully be free of refunds.
The third biggest offender of PPI claims is Barclays Bank. The bank has come under fire this year for wrongly telling people they didn’t have PPI policies. In addition to this, Barclays Chairman John McFarlane stated that many PPI claims were fraudulent, with people simply wanting to get extra cash.
What Will Happen after the PPI Deadline?
30th August 2019 won’t quite be the end of PPI claims for the banks or claims companies. Many claims will still need resolving. This means bank employees will continue with any outstanding investigations. PPI claims companies will also be following up with the banks and notifying customers when their claims are resolved.
Those who have sent their PPI claims to the FOS for review may have to wait even longer for a result. The FOS has received a considerable number of claims from those who have decided to challenge the decision made by their bank. The backlog means that some people will not find out the result of their PPI claim until potentially long after the deadline, as the FOS seeks to review and resolve all cases.