Kamran Mirshahi is the director of the trusted and reputable PPI claims company Canary Claims. Here, Kamran shares his thoughts about the effect of PPI on the banks and if we’ve lost trust in them.
The end is drawing near for customers being able to reclaim their mis-sold PPI. The countdown to the PPI claims deadline of 29th August 2019 is now well underway. The banks have taken a severe beating, with £27 billion paid to customers over six-and-a-half years. As the deadline draws nearer, the banks will finally be able to carry on with their day-to-day business. They won’t need to worry about PPI claims or adding more money to the provisions pot.
The PPI saga has been damaging not just financially for the banks, but also in terms of reputation. 55 per cent of consumers don’t trust British banks to work in their favour. This worrying statistic means problems, as small businesses look for a bank to take care of their money.
Are PPI claims going to increase?
It’s too early to say whether the PPI deadline will create an influx of complaints, as the official promotion only began in August. However, the banks are bracing themselves for a rush and have increased the amount of money put aside for PPI claims.
If the PPI deadline campaign does its job well, the remaining people who are owed PPI should be encouraged to reclaim. With claims companies offering PPI claims with no win no fee, there is little reason for people to hold back from making a claim.
There are also new grounds for making PPI claims, even if a previous claim was unsuccessful, thanks to the Plevin ruling. This means that if PPI was sold and the commission was over 50 per cent, you are due a refund, as the amount of commission was not made clear at the time.
It’s yet another reason why the banks are expecting a surge in PPI claims over the next two years. More promotion, more ways to claim and a finite amount of time to do so are factors that look set to give banks a real headache in the coming months. A claim can take up to six months, but, by early 2018, we will be able to see if the deadline is indeed encouraging people to make a claim now before it’s too late.
Do people trust the banks?
Small businesses need to use a bank they can trust, but trust levels between customers and countless UK banks appears to be extremely low following the PPI scandal. The real problem is the number of banks involved. If you turn away from one high street bank because of their PPI misselling history and try another, they are also likely to have been involved.
One customer who received a four-figure sum claimed that he had a number of accounts with his former bank, but not anymore. He claims, ‘obviously I don’t have that anymore because there is a distrust between me and the bank I was with.’ Yet again, the banks are causing distrust amongst their customers and causing them to go elsewhere.
Have the banks learnt their lesson?
Many would argue that the banks have simply not learnt their lesson. In fact, whispers are spreading about other products turning into the next PPI scandal, such as car finance.
However, given the extent of how much the banks have paid out for the PPI scandal, it is likely that they will tread with caution. At the moment, the Financial Conduct Authority (FCA) is watching them closely to see how they respond to PPI claims before the deadline.
As for individuals and businesses wanting to make sure they aren’t mis-sold products, extra precautions can be taken. If consumers have learnt anything from the misselling scandal, it’s to be scrupulous when taking out a product with the bank. One possible positive to come from the PPI saga is increased vigilance and due care from consumers and small businesses alike. Never be afraid to ask about a commission or optional insurance and check all documentation closely.
