Can your bank ask you to return your PPI compensation?
After the mammoth PPI mis-selling scandal amounted to £25 billion in compensation payouts for mis-sold PPI polcies, the customers slowly started realising that they had been wrongly sold the policy. People who were self employed or came into the category of PPI exclusions, completely lost their money. This led to the affected buyers making claims for a refund of their money from banks and other financial institutions. The banks got an overload of tasks dealing with the mis-sold PPI customers and returning their claims after making proper calculations.
However, due to the huge number of people who were supposed to be dealt with, the banks often paid more money to the customers than their actual compensation amount. On realising, they asked the customers to return the extra amount back to the banks. This has shocked the customers as banks have asked for up to £15,000 of money back, that too in some instances after four good years of paying their compensation.
Honest mistake or a New Bank tactic?
However, it is also a matter of suspicion, as this might be a trick by the banks to claw back some of the money they have paid out to the customers as PPI compensation. As the PPI policy was sold in a secretive and scandalous way, it is difficult to ascertain the exact amount of compensation that the mis-sold buyer is supposed to receive. Hence, there may be a possibility that the banks have been taking advantage of this confusion and asking the money back claiming it to be a calculation error.
Till now, almost 12 million mis-sold buyers have been reported of claiming compensation for mis-sold PPI. The banks, however, often cause delays in payments. They give various reasons (or rather excuses) – be it an overload of claims, lack of workforce, time required for double checking the payments and policies or simply technical errors.
How Such Mistakes Can Affect The Customers Even More
Christine and Christopher Smith, a couple from County Durham, faced a huge issue regarding banks claiming back their compensation. They were mis-sold PPI, whose compensation was received in the year 2012, amounting to £14,739. After four years, their bank sent them a letter saying that they were not entitled to this sum of money, and asked them to return it to the bank. Sadly, they had already invested this sum in their business over the course of four years. This shows how people get affected by this act of banks clawing back the compensation. There has also been a case where a man was asked to repay £3,634 out of the £5,704 worth of compensation received.
It is strange how banks can get accurate in their calculations after years of paying compensation to the buyers, but not at the time when they were repaid their claims. They may also face a number of issues while dealing with millions of claims that the PPI buyers make. They also have a big responsibility of making the appropriate calculations of the amount of compensation a buyer is supposed to get after claiming mis-sold PPI. However, there has always been a debate on whether this practice is genuine or a trick. If it is a genuine issue, we should give a benefit of doubt to the banks and appreciate the commendable efforts they make. Nevertheless, if the banks are trying to trick us by clawing back the refund, they are only adding to the manipulative PPI scandal that engulfed a lot of victims.