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FCA Unable to Predict the Costs of PPI for Banks

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According to the Financial Conduct Authority (FCA), the amount of money the payment protection insurance (PPI) scandal is going to cost banks in reimbursements cannot yet be predicted.

A final decision on an end date for claims is looking more and more likely to be the spring of 2018, and the FCA have admitted that they simply don’t know how much more banks are going to have to pay out in compensation to the people they mis-sold PPI schemes.

In a statement, the FCA said, “We concluded that no amount of data or effort could give us reasonably precise and meaningful numbers on the future path of PPI complaints.”

So far the PPI claims have cost the financial sector roughly £27 billion, both for compensation and administrative costs. Now that there is a deadline set, it’s thought that there will be another influx of claims for the banks to process. This means we will almost definitely see this figure of £27 billion increase, but by how much is apparently anybody’s guess.

Consumer groups such as Which? have been against the setting of this deadline, believing that it is a way for the banks to avoid having to pay back the compensation they rightfully should, and that people who have lost out on money deserve it back.
In a statement, Richard Lloyd, the executive director of Which? wrote, “It’s hugely disappointing that the regulator is pushing ahead with a blanket PPI time limit. Instead of rewarding the banks that have dragged their heels over paying out compensation, the FCA should be requiring firms to proactively seek out customers owed money.”

However, the banks are actively writing to 5.5 million people who could have potentially been mis-sold PPI. On top of this the FCA is expecting banks and other firms who sold PPI to pay for the cost of a marketing campaign, which will tell consumers about the time limit that has been set. This is expected to cost £42.2m. So far, the amount that has been paid out to 16.5 million people has totalled £21 billion.

Here at Enjay Claims, we don’t want anybody to miss out on the money they’re entitled to. If you think you could have been miss-sold PPI, we’re here to make sure you receive full compensation before the deadline. We make the whole process as easy and hassle free as possible, taking care of all the technical side of the process.

If you have any questions, we’d be happy to answer them. Please feel free to contact us either by phone on 0800 612 7958 or by email at info@enjayclaims.co.uk for more details and to begin the process of regaining your PPI compensation.

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