Many customers have been mis-sold PPI packages over the past several years. Although they were skeptical they wouldn’t be able to get their money back, many of them have levied lawsuits against many of the banks and other financial institutions that have sold them these packages. The lawsuits have been overwhelmingly successful.
Hundreds of thousands of UK customers have successfully sued banks for mis-sold PPI packages. From January until June, the settlements reached a staggering 557 million pounds. Unfortunately, these settlements have done little to discourage the banks from initiating these controversial programs.
In fact, the Financial Ombudsman Service finds the number of PPI claims remain disturbingly elevated. The FOS stated that the number of PPI claims it was forced to investigate has peaked 3,000 since September. Approximately 90% of the time the FOS rules in favor of the customers, yielding an average settlement of nearly 3,000 pounds. Some settlements have exceeded 10,000 pounds.
After over half a million customers filed suits in the first half of the year, the FOS is beginning to feel as if there are some major challenges ahead. They stated that it is concerning that so many customers purchase PPI insurance in case they become ill or otherwise unable to meet their obligations, only to find that those payments are never made.
Five months ago, the FSA told major banks that they needed to start being more proactive about making their payments. The FSA had accused the banks of trying to withhold payments on PPI settlements. The banks initially challenged the claims, but withdrew their opposition.
