What were the Original PPI claims about?

The initial principle of PPI was that it was to be sold only to those people who would need help on their payments for Mortgages, Loans and Credit Cards if they were to be forced to come out of work. Sounds useful doesn’t it?

In theory the product should have worked to the consumers benefit, but in reality many banks and lenders used the concept of PPI to exploit those who didn’t really need it. Any rules and guidelines around the policy were completely disregarded, so much so that PPI became one of the most expansive policies in the financial sector.

All was going very well, of course when consumers and watchdogs started questions about how the criteria in which PPI was being sold, banks and lenders found themselves being gradually exposed for selling policies in which many consumers would find themselves unable to claim what they were paying for. Ultimately the Financial Services Authority (FSA), found that there was an even bigger scandal than what was initially thought.

The magnitude of the companies negligence when it came to regulating why the policy should be sold and who it shouldn’t have been sold to, meant that almost £5 billion was estimated to be due in recompense. A very extensive issue that was cropping up as a common occurrence was that many people who had been roped into PPI were never informed of the several exclusion clauses that would result in a lack of a payout, this information was never relayed because companies had incentivised selling as much PPI regardless of any rules.