Home Money What does a PPI compensation payment consist of?

What does a PPI compensation payment consist of?

There is much more to a PPI compensation payment than you might at first think. The level of compensation you get is not just based on how much you paid the bank in the first place for the payment protection insurance, but also takes into account any of the interest that you would have earnt on that money since then.

This means that if you took out a credit card or loan ten years ago and had to pay PPI on it, you will have not only the total amount that was spent on the policy, but also ten years’ worth of interest on that amount. When you think of it this way, it becomes clear that making a PPI claim is an excellent idea from a financial perspective.

The interest factor is one of the reasons that the costs for banks have risen so much. Not only have the institutions had to pay back the original amount that they took from customers, but they also need to pay for the interest on top of that. Then there are the thousands of extra staff that have been employed, both here in the UK and abroad, in order to deal with the volume of claims. Those staff need computers, phones, office space and so on, which adds even more on top of that original amount.

Of course, the banks could have avoided all of this by not defrauding you in the first place. The money that you spent on PPI payments could easily have gone somewhere else, like a savings account or towards paying off other debts. That way, it would probably have earnt above interest rate or have helped you sooner rather than later. As you can see, just because the bank is paying you back the money (and making doing so as difficult as possible), it doesn’t mean that they are in the clear.

There have been calls for the banks to contact people who may be entitled to compensation themselves, rather than waiting for people to come to them with a claim. However, the banks are utterly opposed to doing this as it would result in them having to deal with even more claims and pay even more people, so it is up to you to get in touch with the relevant people. Whether you launch the claim yourself or go through a claims company, you should know that it is money that you deserve to get back.

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