According to research carried out by the FCA (Financial Conduct Authority) 64 million PPI policies were sold in the period between 1990-2010, however some claims were even made as far back as the 1970’s.
The problem here lies in the fact that the PPI was often mis-sold, in fact more than £37 Billion has already been paid back to those who complained about the sale of PPI to them. These complaints started in 2005 when Citizens Advice issued a super-complaint about the mis-selling of PPI and with this a growing number of consumers realised that they may have been mis-sold PPI, with banks paying compensation from 2011.
“The PPI scandal reached pandemic proportions. It is a real lesson for banks and the wider industry that they cannot get away with mistreating their customers. After dragging its feet when we first raised concern about PPI the industry is paying the price for not taking action sooner” – Gillian Guy, CEO Citizens Advice
The amount you receive back in a PPI claim is comprised of three main elements:
1. A refund of the PPI you paid.
2. If the bank added an extra loan to your original loan just to pay for the PPI, you get back any interest you were charged on this extra loan.
3. You get statutory interest (at 8% a year, but not compounded) on the total of both those sums, for each year since you got the PPI.
Of these, only the third element is liable to be taxed (usually at 20%). This is usually shown on the pay-out statement.