Many banking customers are filing PPI claims against the companies that sold them payment protection insurance products that couldn’t have ever been exercised or utilised by the customer. In other words, banks knew that these policies were drawn up such that the subscribers would have a very difficult time realising any of the benefits, and took advantage of the fact that many of their customers were ignorant of complex financial terms.
As a result of this, many customers are filing their PPI claims in record numbers. The banks are adjusting to the influx of its planes and claims, but the government has certainly stepped in to provide more pressure on behalf of the general public who have these complaints.
The banks and issuers of these various PPI products are promising to help improve things such as response time to claims, and other aspects such as reimbursement rates. The problem, as customers see it, is that banks are obviously dragging their feet processing these claims at a more efficient rate and pace for obvious reasons: that’s simply because they don't want to pay out on any of the claims; they simply don't want to be liable for more than they were planning to be liable for.
What are PPI policies again?
For those that aren’t caught up on what PPI is, it’s basically a feature of a credit card or mortgage that you can opt into. It adds fee and amount to the standard set of interest fees and charges that come with the debt product-proper. Some cases the PPI's service fees can add an additional 5 to 15% of the total that product’s debt load.
These PPI services were meant to cushion a customer in case the debtor found himself or herself suddenly unable to make payments on the mortgage or credit card that he or she were holding. In theory, that was how things were supposed to work anyway – at least that's how most of the customers understood it.
Unsophisticated Banking Customers
But in reality, technically speaking, these contracts did not stipulate circumstances as such. In fact, many banks – customers are saying – sold these PPI products knowing that they had a small chance of ever being cashed in or exercised as its subscriber. When indeed a subscriber did try to file a PPI claim, he or she simply was denied outright.
Customer Dissatisfaction and Government Pressure
And now, a systemic dissatisfaction is rippling through entire markets; customers are organising, and the government is getting involved, putting pressure on banks to step up its efforts on processing these claims in a timely manner. The problem for banks is that, in some cases, it’s not that they don’t want to process these claims in a timely manner, it’s that they can’t: because the volume of calls they receive out on these PPI claims on a daily basis is huge and they really can't process these claims in a satisfactory way or at a satisfactory rate.