Banks Give in Over PPI

Posted: 19th May 2011

Payment Protection Insurance (PPI), which was sold aggressively by many of the clearing banks during the debt boomCommercial property 1110 of the 1980s and 1990s, has led to large provisions being made for losses as the banks have abandoned attempts to fight mis-selling claims.
Thousands of customers w ere sold PPI policies, which undertook to cover loan repayments on lo an in the event that the borrower became unemployed or fell ill and was unable to make the repayments. The policies were extremely profitable for the banks because the claim rates were very low and the policy costs were high.
However, following widespread complaints and successful litigation, the banks have abandoned their struggle and have earmarked more than £5 billion to meet claims.