By Daniel Hunter
British consumers are missing out on £18.3billion worth of compensation for the mis-selling of PPI policies by not reclaiming what is rightfully theirs. The final amount due for financial mis-selling would be even more if consumers reclaimed what is owed for mis-sold endowment mortgages and savings and investment products.
Claims management company EMCAS is urging almost 11 million adults in the UK, who are either unsure if they can claim for financial mis-selling or have no idea if they have been mis-sold to or not, to take action now to find out if they have a claim. If they don’t the financial services industry will get away with decades of mis-selling.
Research released by leading claims management company EMCAS highlights that financial mis-selling remains an issue and consumers are still not reclaiming their money. Those who have been mis-sold to but have yet to make a claim could be missing out on substantial amounts - the average payout for a claim about mis-sold PPI is £2,650. At the same time, our experience shows that consumers who are making claims are experiencing delays as banks refer increasing numbers of cases to the Financial Ombudsman Service.
“Our primary concern remains that victims of financial mis-selling reclaim what is rightfully theirs. The voice of consumers needs to be heard above that of the banks," David Walter, spokesperson for EMCAS said.
“Our evidence shows that there are still significant sums of money due in compensation but 17% of consumers aren’t sure if they are a victim of financial mis-selling. We encourage them to check and be sure. Whilst consumers may face a number of obstacles when making a claim we urge them to persevere to right these wrongs.”
Consumers are inundated with news about mis-selling but those who feel they might be entitled to a payout are still not taking action to reclaim their money for a number of reasons:
- 31% are confused if they can make a claim or not;
- 28% haven’t thought properly about whether they have a claim;
- 25% don’t feel they have enough knowledge to make a claim on their own;
- 22% say they don’t have enough time.
When it comes to Payment Protection Insurance banks are still underestimating how much consumers could potentially claim. Whilst many have recently increased the amounts they are setting aside for compensating consumers, it’s still not sufficient to compensate for the estimated 6.9 million mis-sold PPI policies still to have a claim made against. Based on average payouts this could amount to over £18.3billion.
Despite the large amount left to claim and the media hype surrounding PPI, consumer confusion still reigns and people are still not reclaiming what’s rightfully theirs. PPI was an add-on to a broad range of financial products such as loans, credit cards and mortgages and was often added without the customer knowledge. This adds further confusion for customers when they are trying to find out if they may have been mis-sold to.
Experts at EMCAS estimate that there still people with endowment mortgages across the UK who could claim for mis-selling, despite many cases being time-barred. Consumer redress has been limited by widespread time-baring, however consumers should not be put off.
On average, there are 85,000 complaints about mis-sold savings and investments products every year, with the average claim being paid out worth over £1,0005. The FSA’s recent mystery shopping survey revealed that around a quarter of sales being made to consumers could be unsuitable. As a result consumers do still need to be vigilant when taking out a financial product to ensure it is suitable for them.
“Banks have yet to fully acknowledge the extent of the money they need to repay consumers who have been affected by mis-selling," David Walter, spokesperson for EMCAS said.
“At EMCAS we aim to help consumers identify whether they have been a victim of mis-selling and may have cause to make a claim. Our expert teams are able to help customers navigate the process and ensure that they get the right pay out due to our experience of managing claims on a day-to-day basis. We urge all consumers who think they may have been mis-sold to, to claim back what is rightfully theirs whether this be with the support of a professional claims management company like EMCAS or on their own.”
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