Payment Protection Payouts
Figures released by the Financial Ombudsman Service (FOS) have revealed that £557 million was paid out in payment protection insurance compensation in the first half of 2011. The average customer payout was £2,750 with a total of 532,000 complaints registered. The high number of payment protection payouts is more surprising when it is considered that 200,000 PPI complaints were placed on-hold while the Judicial Review was pending.
The Judicial Review centred on the legality of new Financial Service Authority (FSA) guidelines which would require lenders to actively review past payment protection sales and identify potential cases of mis-selling. Some lenders were unhappy with the rules which they felt would force them to apply new rules to old sales. While the case was pending four of the Country’s largest banks opted to place all complaints on hold creating a backlog of claims. This also meant that no payment protection payouts were auctioned for several months. Once the Judicial Review was settled in April, banks began working through complaints and this, obviously, had a significant impact on the payout figure.
Although the figures for the first half of the year are significant the total for the second half of the year is likely to be substantially higher. In August alone £230 million was paid out. This leap is likely to have been partly influenced by complaints working their way through the system after the settlement of the Judicial Review, but also due to an increase in new claims following the conclusion of the Review.
If you believe you have been mis-sold a payment protection insurance policy on a loan or credit card you have the right to make a claim. £9 billion has been allocated by lenders to address this issue and it is estimated that more than two million policies may have been mis-sold.