07 October 2015

The information contained within the following news articles have been pre published. The articles were published on the dates indicated and the information contained within these issues include references to taxation, legislation, regulation and other issues or concerns that may no longer apply

The £5bn PPI debacle


Last week, Barclays, HSBC, Lloyds and Royal Bank of Scotland gave up a legal action over the rules governing the assessment of miss-selling claims for the selling of payment protection insurance (PPI). 

This means that more than five years down the line, Britain's biggest banks have finally admitted their collective shortcomings over PPI and it paves the way for hundreds of thousands of claims to be assessed.


The insurance was originally designed to safeguard customers’ repayment of their personal loans, credit cards and mortgages in the event of illness, but the policies were often poorly explained and sold to customers regardless of their needs.  The banks have set aside more than £5bn to cover claims.


Abandoning of the legal action means that the backlog of existing claims can now be dealt with and many banks are bolstering their complaint tams in order to deal with those that had been put on hold.  Under FSA rules, some customers may not even have to complain, as banks will have to undertake a close analysis to assess whether the insurance was sold with the customer’s best interest in mind.


While many thousands of customers were pushed into taking out useless cover, not every purchase of PPI will be a miss-sale.  If you think you were mis-sold, PPI, you will need to show good reasons why the insurance was not appropriate for you.  These might include:

  • Your offer of credit was made conditional on taking out PPI
  • Without cover, it was suggested that credit might be declined
  • Your health and medical status were not checked before you were advised to take cover
  • You had other policies in place that might have covered you in an emergency
  • The conditions and restrictions of the cover were not clearly explained
  • Given your work status (e.g. Freelance) you were sold cover that would have been difficult to claim on


The Financial Ombudsman has useful factsheets and information that can help you decide whether you think your cover was mis-sold.  Visit financial-ombudsman.org


Paul Dixon 


Chartered Financial Planner

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