The FSA (Financial Services Authority) has recently announced a new scheme which means that mortgage companies may have to pay up to £60 million to customers who were mis-sold PPI policies on their mortgages. The FSA investigation revealed that a number of companies had increased premiums associated with mortgage deals, whilst at the same time reducing the cover available.
The FSA have now decided to intervene on behalf of the estimated 2 million people who have been impacted. An agreement with the industry means that the total of £60 million in additional PPI funds will be reimbursed to customers and levels of cover returned to those eligible, provided this was before the start of 2009. These payments will cover schemes which changed in 2009 although there is likely to be further investigations held into earlier PPI agreements in the near future.
Many thousands of mortgage holders in the UK fell into the PPI trap because many providers automatically included customers into the scheme without their knowledge. As a result of this, a number of policies were running despite the fact that the particular policy was irrelevant for the customer’s particular needs.
It is widely rumoured that a deadline is about to be imposed for customers to claim back on their mis-sold PPI policies. In the run up to the autumn of 2018, it is believed that the banks have contributed to an advertising campaign to warn customers that once that deadline is passed they will no longer have any grounds to claim.