Consumers who have been mis-sold PPI in Caithness, Scotland are being advised by the local consumer advisory group to take on the companies who sold them the PPI policies and reclaim PPI themselves.
The Highland Council's Money Advice Team has suggested that people mis-sold PPI insurance for loans or mortgages could use advice provided by the Financial Ombudsman's Service to get their PPI refund.
Most consumers who are owed money from having been mis-sold PPI policies make a claim to get PPI compensation using a claims company, which can often cut through the red tape much more easily than consumers acting alone to try and get a PPI refund.
However, Pat Sproul - money advice senior with the Highland Council - said:
"A lot of publicity has been given to the mis-selling of payment protection insurance (PPI) by banks, loan companies etc and many people may feel they could be eligible for a refund."
"We see clients who come to us for help with their debts and they have paid a company a substantial sum to reclaim their PPI. "
"This sum could have been used to help clear debts instead, so we always encourage clients to make the claim themselves."
The Financial Services Authority (FSA), which regulates payment protection policies, has said that banks and loan companies could have to pay back as much as £2.7 billion to meet all the PPI compensation claims - and almost three million consumers in the UK might be entitled to some form of PPI refund, whether for a loan, payment protection on purchases - or PPI mis-sold on mortgage payments.
The website of the Financial Ombudsman Service offers consumers advice on how they can reclaim PPI themselves - as well as forms to download.
However, a reputable firm specialising in handling a PPI refund would be able to offer legal advice - and most PPI compensation cases are handled on a No win No fee basis, meaning consumers do not have to pay until their compensation settlement has been agreed. Because of this, many consumers prefer to leave the negotiations to reputable claims companies to get their PPI back for them.
The Financial Services Authority has also published guidance for any companies which have mis-sold PPI to their customers - and the FSA has said that it expects companies which have mis-sold PPI to contact any customers affected to advise them of their rights in case they wish to reclaim PPI.
Even customers paying for items on credit from mail order catalogues have been charged PPI to cover payments in the event of redundancy - and some of these policies have been found to be costly and not fit for purpose.
Despite the advice to Caithness consumers to handle their own PPI refund, many consumers who have been mis-sold PPI still prefer to use claims handlers from a reputable firm to handle their cases, rather than tackle head-on the companies which mis-sold them their PPI.
The FSA estimates that around 550,000 new complaints about PPI refunds will be lodged every year until 2015 - the average payout in PPI compensation settlements is estimated to be around £900 for consumers mis-sold regular premium PPI policies - and up to £1,800 for those mis-sold single premium policies.
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Nik Jones is a professional PPI Advisor at PPI Refund. For any type of PPI refund or PPI claims, call for free on 0800 044 5196.
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