The personal insurance protection (PPI) sector is gearing up for another bonanza in payouts by the banks involved in the enormous mis-selling scandal. In the last six years, some £26.5 billion has been paid out to customers — and claims firms reaped £5 billion of that in fees. Now, small businesses looking to handle another round of PPI claims can enjoy substantial revenue streams, all with the aid of specialist claims software.
To finally bring an end to the entire PPI imbroglio that has scandalised the UK financial market and sullied its reputation, the Financial Conduct Authority has decided to impose a deadline by when claims must be made: August 29, 2019.
Later this year, the FCA intends to let everyone know about it; a multimillion-pound advertising campaign will launch around August — paid for by the relevant banks. The blitz is sure to trigger a rush of PPI claims among the public and claims companies around the UK are primed for the action.
The head of the FCA, Andrew Bailey, says its efforts were focused on spurring people to act now, rather than leave it until much later, avoiding the PPI saga dragging on endlessly.
‘Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off. We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint,’ he adds.
Big PPI claims business with claims software
There is a lot of business at stake. Since 2001, a total of around 34 million PPI policies worth around £50 billion were sold by the banks. Many of them were sold to people who were unaware of what they were, or that they even had them attached to the financial products they purchased.
Most PPI policies were sold alongside unsecured loans, credit cards and mortgages, or secured loans. It was designed to ensure people could still make repayments in the event they were injured or became ill and could not work, or if they lost their jobs or died.
The problem was that people had to keep on paying for their PPI policies, whether they were aware of it or not, regardless of if they wanted the product.
The large banks that have been peddling PPI — and busy paying out the billions in compensation to date — are also preparing themselves for the incoming tsunami of claims. The big four who are largely responsible for PPI mis-selling (Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland) have been topping up their compensation pots and have now set aside at least £30 billion.
Dealing with PPI claims, the winning way
With the average PPI claims payout at £2,750 and the best PPI claims companies firms taking between 15 per cent and 30 per cent in fees, firms that can handle the most claims will win over their rivals. Appointing staff to manually handle claims is time-consuming, expensive and fraught with errors that can end up being costly.
Using claims software, on the other hand, automates the entire process and dramatically ramps up the amount of claims that can be handled. Small businesses involved in the PPI sector can now work like the big boys, without having to come up with the capital to hire large numbers of additional personnel.
There is no doubt that there are vast riches to be had in handling PPI claims over the next two years or so. It’s an opportunity that will likely not be coming again. Businesses priming themselves to get the most revenue and profit possible will certainly be using claims software to get ahead.
Nominations are now open for the British Small Business Awards, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today using the hashtag #BSBAwards. Good luck!