Banks and other lenders have been ordered to reopen more than 2.5m com plaints about payment protection insurance (PPI) because the City watchdog suspects many customers were either rejected or paid too little in compensation. The Financial Conduct Authority (FCA) said that in 2012 and 2013 the share of PPI complaints decided in customers' favour by lenders dropped. It concluded that some claimants were treated unfairly.
The regulator's intervention is a further blow to the financial industry's reputation. Banks and other lenders sold about 45 million PPI policies between 1990 and 2010. The policies sold with loans and credit cards to protect customers against non-payment if they became ill or unemployed were worth £44bn to the sellers. But in many cases the insurance either was not needed, failed to pay out or customers did not even know they were paying for it.
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