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Women missing out on their half of PPI claims

Cherry Reynard
Written By:
Cherry Reynard

A Payment Protection Insurance loophole put in place by the banks could see divorced women miss out on £3.4 billion every year.

People who take out a joint financial product with their partner could be eligible for PPI compensation, but may be named second on the policy and won’t know if their former partner makes a claim.

The problem disproportionately affects women, says claims specialist First Target Recoveries, many of whom may be due thousands of pounds.

In 2016, NatWest and Royal Bank of Scotland refunded thousands of divorced women who lost out after RBS-Natwest issued the full PPI payouts on joint financial products to their former partners. This issue was only rectified when PPI experts brought the error to the attention of the bank.

Banks are now obliged to half a PPI refund for joint accounts in reserve, but aren’t obliged to tell the other partner, leaving billions sitting unclaimed. The average PPI payout is £2,000, with some people having received over £100,000 back from the banks.

Chris McCabe, associate director at First Target Recoveries, said: “After wading through the messy process of dividing assets and building a new life without your former spouse, a divorce could set you back up to £70,000. Many people have been shocked to discover that following their split; their partner has claimed a PPI refund on their shared financial products and they can receive half of that refund, yet they’ve been left in the dark and out of pocket for quite some time. In some instances, they never find out about the money.

“Others have avoided making a claim for fear of having to deal with their former partner again, however as long as they know which financial products they took out, they can make a claim without ever needing to speak to their partner.”

A deadline has now been applied to claim PPI compensation – August 2019. See YourMoney.com’s Guide to claiming PPI for more information.