Reclaiming PPI can seem complicated - and the fact that banks are challenging as many as half the PPI refund claims being made can make the whole process seem a little scary, too.
The Financial Services Authority (FSA) regulates PPI complaints and PPI compensation claims - and in 2011, the FSA won a legal battle against the British Bankers' Association, which paved the way for as many as three million consumers to make claims for PPI compensation.
Experts say that the total payout for PPI compensation could be as much as £9 billion.
Consumer Credit Act 1974
The FSA - which regulates the financial sector - is on the side of the consumer who has been mis-sold PPI and wants a PPI refund.
Consumers in credit agreements with banks or other lenders are protected from being sold a financial product such as payment protection insurance (PPI) by the Consumer Credit Act 1974.
The Consumer Credit Act 1974 is also the piece of legislation which protects consumers who buy faulty goods on credit cards and it works by regulating all the different transactions that may take place between a company selling a product and a customer - whether that product is an item or a financial product such as a mortgage, loan, or credit account. This is why consumers mis-sold PPI can obtain a PPI refund - ie because the product was not suitable.
The government has drawn up the regulations contained in the Consumer Credit Act 1974 and the need for a set of regulations to govern credit agreements was first recognised in the mid-1960s, when the boom for paying for goods using credit and credit cards began to take hold.
At that time, no one might have foreseen that, 50 years later, millions of consumers would be claiming billions of pounds in PPI compensation.
However, most companies which offer credit must apply for and be granted a Consumer Credit Licence to make sure they work within the regulations set out by the government.
So why was PPI mis-sold?
PPI was really a very sensible idea in practice - the possibility of taking out insurance to cover credit payments if a consumer became ill or was made redundant in theory was a good one.
However, poor practice lead to consumers being sold PPI which was not suitable for their needs - and because explaining PPI can be complicated, on occasion, it is possible vital facts about the policy were omitted by the seller in the rush to close the deal.
The result is that, if a consumer has been mis-sold PPI under the Consumer Credit Act 1974, they can reclaim PPI. This is made easier by specialist firms working on a No win No fee arrangement, who can take on banks or other financial lenders and win consumers PPI compensation much faster than tackling a bank or credit company on your own.
There are time limits set for making a claim for PPI compensation, so contact a reputable claims management company about a PPI refund as soon as possible.
Call PPIRefund4me today for free on 0800 044 5196 or visit www.ppirefund4me.co.uk for more information.
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PPI Refund 4 Me is a trading name of UKMS Money Solutions Limited regulated by the Ministry of Justice in respect of regulated claims management activities. CRM26720
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