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Banks About to Send Letters to Customers of Mis-Sold PPI Packages

Banks About to Send Letters to Customers of Mis-Sold PPI Packages

Despite all of the PPI lawsuits that have taken place over the past couple of years, some holders are still unaware that they can claim losses on the PPI packages they have held. The Financial Services Authority has decided that banks need to be more transparent with their practices. They have ordered banks to send letters to their customers advising them that they are eligible to apply for compensation on mis-sold PPI claims.

The FSA has been concerned that the banks may try to phrase the letters in a confusing way to discourage people from applying. Therefore, it has made an almost unusual demand. They have said that banks will need to phrase the letter clearly and explicitly. They will not be allowed to use any jargon that will throw off their customers.

The FSA has said that previous letters have been sent to customers. However, the response rate has not been very good. This has caused them to decide that they need to create a new order that is likely to get more responses. The FSA is also telling customers that they should definitely consult with the firm if there is any chance of getting compensation for a possible mis-selling. Also, they will need to use discretion if they are to purchase PPI packages in the future.

These letters will have to hit a number of key points, including:

  • Informing customers that they may have been mis-sold a PPI package.
  • Explaining why the mis-selling may have occurred.
  • Giving customers a potential set of solutions to resolve the problem.
  • Informing them what time frame they will have to work within if they intend to request compensation.

The FSA hopes that this is going to create a number of new opportunities for victims of the PPI scandal. Drawing more awareness to the situation and laying down the law for the High Streets banks that have been involved in the PPI scandal may be the necessary steps to turning things around.

The progress in resolving the PPI disaster has been much slower than many have hoped. Although the banks have paid out nearly £2 billion, they have only compensated victims for about a quarter of the amount they are owed. This creates some skepticism over how effective the FSA’s new ruling is going to be. Even if customers are aware of the opportunity to apply for compensation for their PPI mis-sellings, there is absolutely no guarantee that they are going to be able to get their money back within a predictable time frame.

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