With Christmas just two weeks away, the PPI deadline is likely to be the last thing on people’s minds. But 29th August 2019 is getting closer and if consumers don’t act soon, they could miss the chance to reclaim PPI.
In January, consumers will have just eight months left to make a claim. There is no doubt that the Financial Conduct Authority (FCA) will have one more batch of advertisements featuring Arnold Schwarzenegger ready to promote the deadline.
PPI claims companies and the banks are gearing up for a busy eight months. Since the announcement of the deadline, many of the banks have dealt with an increase in claims. Lloyds is receiving 2,000 more claims a week than its projection, totalling 13,000 PPI claims a week.
As the deadline gets closer, it’s likely that the banks will be busier. PPI claims companies will not only need to handle a surge in claims but also look towards their plans after the deadline.
PPI Claims Companies — What Will They do Next?
The best PPI claims companies have reported a surge in claims since the announcement of the PPI claims deadline. But competition is fierce within the market, with the government introducing an interim fee cap for all companies handling PPI claims.
Many companies used to charge in excess of 30% + VAT on successful claims. Now, however, companies must charge 20% + VAT (24% total) or less. This has dramatically cut the profit margins for some claims firms. PPI claims companies that have always charged below this threshold will retain the upper hand as customers seek out a reputable and low-charging company to handle their case.
After August 2019, even the best claims companies will need to change their strategy and market. There are a number of other potential claims for them to process, such as mis-sold mortgages, flight delays and payday loans. Many businesses will currently be making plans for after the deadline.
The Banks Can Soon Relax
Having collectively paid over £32 billion to consumers for mis-sold PPI, the banks will be collectively sighing with relief in August. Lloyds Banking Group is the biggest offender, but this doesn’t mean that other companies have come away unscathed.
Barclays has come under fire for multiple reasons. Most recently, it admitted that some people were denied a PPI claim in error. The bank said it would contact those affected. Shortly afterwards, however, the chairman of Barclays made a bold statement that PPI claims had turned the UK into fraudsters, with many making fake claims. He went on to say that this suited the government as it encouraged more spending in the economy. In the first half of the year, the bank reported a 29% drop in profits. Although not all of it is attributed to PPI claims, it is one of the reasons for the bank’s losses.
Each bank has suffered from repaying customers, paying fines and contributing to the £42 million advertising campaign by the FCA. When the deadline is over, they will soon be able to relax. However, with thousands of complaints still being resolved by the Financial Ombudsman Service (FOS), it’s likely that more money will be refunded in the months afterwards.
Some have cited mortgages, payday loans or pensions as the next big mis-selling scandal. Whether any of these will be as grand in scale as the mis-selling of PPI is yet to be seen. Until then, the banks and claims companies are facing a busy 2019.