According to the latest figures from the Financial Services Authority, £215 million worth of compensation was paid out, in the first half of 2011, to customers who were mis-sold payment protection insurance..
Although debt solutions provider and DEMSA member Atlantic Financial Management, welcomes the compensation, there is still an urgent need for clarity over how payments should be made to those in Debt Management Plans.
Kevin Still, Director, says:
“It’s encouraging to see compensation reaching the millions of individuals who were mis-sold PPI policies by their lenders. However, we need to ensure that we protect the interests of people who are already in Debt Management Plans (DMPs) or who are in an IVA.
"If a loan is paid off by a successful claim, we need to ensure that the balance and future payments are reduced to reflect this.
“There is also a danger that individuals could incur settlement fees, so we have to work with clients to ensure they manage any compensation payout in the best way possible to reduce their debt.”
The FSA has revealed that £102 million of PPI compensation was paid in May and June alone and the watchdog aims to continue publishing monthly updates.
Each month the FSA will reveal how much PPI redress is being received with totals expected to go up as weeks go by.
Kevin Still adds:
“The industry really needs to work together to bring some much needed clarity around this whole issue, ensuring any compensation payments can be used to reduce the debt burden of those people in serious financial difficulties.
"The OFT’s revised Debt Collection Guidance has to be a good place to start."
