14 March 2016
Payment protection insurance (PPI) is an insurance product that everyone must have heard of in Scotland. Sold by banks and lenders to Scottish customers, as well as across the rest of the UK, the money being set aside by banks to reimburse customers is now totalling over £26 billion - and could grow bigger!
The London Olympics in 2012 cost a purported £12 billion. NASA spends just over £1 billion to build a space rocket, with the Messenger mission consisting of five space rockets.
In other words, if you had the £26 billion in one lump sum, you could organise a mission into space with five rockets, launch them and re-stage the London Olympics all over again - and still have change.
The Financial Conduct Authority (FCA) are consulting on a PPI deadline. An announcement is expected this coming spring. Experts suggest that the deadline, if it is agreed, will be set for the end of summer 2018.
However, until the announcement is made, this is speculation.
In 2013, banks were told to write to customers who they knew had PPI. This letter was to inform them that they may have been mis-sold the product and to make a claim for compensation.
Customers, on receiving it, had three years from the date on the letter to make a claim. Some of those customers may have already made a successful claim but if not, time could be running out. Batches of the first letters were sent in early 2013 which means that the deadline will pass in early 2016.
Lenders are also writing to customers who they know had PPI and so the letter may be genuine. However, if you don't recognise the company, proceed with caution.
Having said that, some credit cards and smaller lenders are part of larger banking groups. For example, Halifax customers may have information that has the Lloyds Banking Group logo as the heading.
If a financial company or bank bought one of these companies or providers in the last few years, they will be honouring any PPI compensation claims. Hence, you may not have a Lloyds Banking Group account but as they bought the credit card company, they will be writing to you.