David Nixon
Here’s the deal. Banks are not your friend. They will extract every last penny out of you if they can and they have products that are not very pleasant. They can screw you over, but they have to tell you they are doing it, they can’t do it behind your back. Hence, the outcry over PPIs.
We need loans, we need mortgages, so we need banks, they are a part of our lives, but thanks to the whole PPI debacle, banks now have to be far more transparent. It makes it a good time to take out a loan, you’re able to make decisions that are going to be a better fit for your circumstances.
Here’s a great graphic that explains the history of PPI in case you’ve been hiding under a rock for the last couple of years. However, in this article, I am going to look forwards not backwards. I’m going to lay out for you the 5 most important facts you need to know about banks and PPI in 2017.
1 – You can’t trust banks
Personal Protection Insurance has been sold to hundreds of thousands of people in the UK, but ‘sold to’ are not the right words, customers were often either not told of the insurance being added to the loan, or they were told it’s compulsory. That’s a big no-no in terms of regulations around financial products. These are just a few of the ways PPI might have been sold to you. Find out more here.
Banks have been caught with their fingers in the cookie jar. They are no longer allowed to offer financial advice, they should make you aware of that fact anytime they mention a product and should inform you about other products.
2 – Banks are greedy
Banks are not your friend, they’re out for themselves, and they’re also greedy. This has never been truer than with the whole PPI scam, orchestrated by the banks. When they started to cut corners with their PPIs, they could have tried to skim a little off the top, I doubt there would be the bad publicity now. But they didn’t, they were greedy and really pushed it, taking sometimes up to 30% on top of the loan amount.
One major high street bank was issuing such loans:
A 5-year unsecured loan for £10,000 would have cost the loan an extra £3267 for the PPI. In this case, the PPI was compulsory as it was in many other cases. In other words, the “interest rate” on the loan could be promoted as a lesser rate, but in reality, when you include the compulsory PPI, it’s often double.
Don’t expect banks to do you any favours, do your own homework and find the right products for you. Expect the worst from banks.
3 – There is not a 6 year limit on claims.
You might have heard or read that PPIs need to have been taken up in the last 6 years for you to be able to claim. That’s not true. Not at all. There is no limit to how far you can go back and claim a PPI. The truth is, banks are legally required to keep data and paperwork on loans for 6 years. Some banks delete and shred documentation immediately, once the 6 years is up, other banks keep hold of if for longer. That’s where the 6 year figure comes in.
Obviously if the banks don’t have paperwork, it makes it harder to claim but not impossible. That’s why some banks get rid of documentations as soon as they legally can.
It’s also 6 years upon completion of the loan. The start date of the loan is irrelevant, it’s when the last payment was made. You could have taken out a loan 10 years ago, but only paid it off 5 years ago, you’re still able to claim.
If you have paperwork on a loan and the bank has deleted their own copies, there is still a good chance you’re in a position to make a successful claim, if you’ve kept your paperwork.
4 – Time is no longer on your side
The Financial Conduct Authority were eventually going to put a deadline on PPIs claims. They have and it’s 29th August 2019. It feels like plenty of time, but it’s not. You’re going to need to start the process sooner rather than later. There’s a backlog of claims, banks are dragging their heels, what a surprise!
You need to start putting in your claim now to make the deadline. Don’t worry, banks have specific deadlines in place so they are not allowed to slow the process down or they’ll face further fines, but you can’t wait around any longer. You can rest assured, banks will take every second they legally can before they take the claim to the next step, so you should plan for that.
5 – You are in control
If you are not sure if you had a PPI, then check through your old bank statements or mortgage papers. If you don’t keep paperwork but know who the lender was, then contact them and ask them for the information. You just need to ask for the T&C of the financial product you took out, backdated to the time you took out the product.
You are entitled to a breakdown of your bank account or any financial products you had. The banks have a right to charge you up to £10 but they are not allowed to take longer than 40 days to send you the information. If they do, you can contact the Information Commissioner and make a complaint.
