What Happened to Payment Protection Insurance (PPI)?
Payment Protection Insurance (PPI) was an insurance product widely mis-sold in the UK alongside loans, credit cards, and mortgages, leading to the largest consumer financial scandal in British history. While the main claims deadline passed in August 2019, billions in compensation have been paid, and some claims, particularly those related to undisclosed high commissions, can still be pursued through the courts. The legacy of the PPI scandal continues to influence financial regulation and consumer protection efforts.
Quick Answer
Payment Protection Insurance (PPI) was a controversial insurance product primarily sold in the UK, which became the subject of a massive mis-selling scandal. The official deadline for most PPI complaints was August 29, 2019, after which the vast majority of new claims ceased. However, consumers can still pursue claims through the courts, particularly if their complaint relates to undisclosed high commissions (known as 'Plevin' claims). The scandal has resulted in over £38 billion in compensation paid to consumers, and its lessons continue to shape regulatory approaches to consumer protection in the financial sector, as seen in recent motor finance redress schemes.
📊Key Facts
📅Complete Timeline12 events
PPI Policies Widely Introduced
Payment Protection Insurance policies begin to be widely sold alongside various credit products like loans, credit cards, and mortgages in the UK.
Which? Magazine Highlights Concerns
Consumer watchdog Which? magazine raises initial concerns about PPI, highlighting it as a poor-value product due to high costs and numerous exclusions.
Citizens Advice Bureau Calls PPI a 'Financial Racket'
The Citizens Advice Bureau (CAB) issues numerous complaints about PPI mis-selling, labeling the industry a 'financial racket' and drawing significant attention to the issue.
FSA Begins Imposing Fines
The Financial Services Authority (FSA), now the FCA, starts imposing fines on smaller lending companies for mis-selling PPI, marking the beginning of regulatory enforcement.
FSA Bans Single Premium PPI
The FSA bans the sale of 'single premium' PPI policies, a particularly problematic type where the entire premium was added upfront to the loan amount, increasing interest payments.
Banks Lose High Court Challenge
The British Banking Association (BBA) loses its High Court battle against the FSA, which sought to challenge new rules on PPI complaint handling. This ruling forces banks to reopen thousands of claims.
Plevin Supreme Court Judgment
The Supreme Court rules in *Plevin v Paragon Personal Finance Ltd*, establishing that undisclosed high commissions (over 50%) on PPI policies could be grounds for a complaint, even if the policy wasn't mis-sold in other ways.
FCA Sets PPI Claims Deadline
The Financial Conduct Authority (FCA) announces a final deadline of August 29, 2019, for most PPI complaints, aiming to bring the scandal to an orderly conclusion.
FCA Launches Awareness Campaign
The FCA begins a two-year consumer communications campaign, including the famous 'Arnie' robot, to raise awareness of the impending PPI claims deadline.
Official PPI Claims Deadline Passes
The final deadline for submitting most PPI complaints to firms passes, leading to a surge of last-minute claims. After this date, new complaints are generally not accepted, except in specific circumstances.
Total Compensation Exceeds £38.3 Billion
The FCA confirms that the total amount paid out in PPI refunds to customers since January 2011 has surpassed £38.3 billion, making it the UK's largest consumer redress scheme.
FCA Announces Motor Finance Redress Scheme
The FCA publishes its final motor finance consumer redress scheme, which is widely compared to the PPI scandal due to its scale and focus on systemic consumer harm from undisclosed commissions. This indicates the lasting legacy of PPI's impact on regulatory action.
🔍Deep Dive Analysis
Payment Protection Insurance (PPI) was designed to cover loan or credit repayments in the event a borrower became unable to work due to illness, accident, or unemployment. While not inherently a bad product, PPI became synonymous with widespread mis-selling in the UK, primarily between the 1990s and 2010. Banks and other lenders aggressively sold these policies, often without adequately explaining their terms, exclusions, or even making it clear that the insurance was optional. Many consumers were sold policies they didn't need or couldn't claim on, such as being self-employed, having pre-existing medical conditions, or already having sufficient cover.
The scandal escalated significantly in the mid-2000s as consumer groups and regulators began to investigate the sales practices. Key turning points included the Financial Services Authority (FSA, now FCA) imposing fines on firms for mis-selling from 2006, and a landmark High Court ruling in 2011 that dismissed a legal challenge by banks against the FSA's efforts to force them to address mis-sold claims. This ruling opened the floodgates for millions of complaints. Another crucial development was the 2014 Supreme Court judgment in Plevin v Paragon Personal Finance Ltd, which established that consumers could claim compensation if a significant portion of their PPI premium was an undisclosed commission to the lender, even if the policy wasn't mis-sold in other ways. This 'Plevin rule' provided new grounds for complaints and extended the scope of the scandal.
The Financial Conduct Authority (FCA) set a final deadline of August 29, 2019, for most PPI complaints, accompanied by a major public awareness campaign featuring an animatronic Arnold Schwarzenegger head. This deadline aimed to bring the issue to an orderly conclusion. In the run-up to the deadline, millions of complaints were submitted, with 1.4 million in August 2019 alone. By April 2021, the total amount paid in refunds to customers had exceeded £38.3 billion, making it the largest consumer redress scheme in UK history. Some estimates suggest the total cost to British banks could exceed £50 billion.
As of April 2026, the primary PPI claims deadline has long passed, and the vast majority of complaints have been processed. However, the August 2019 deadline does not apply to claims taken to court, particularly those based on the Plevin ruling regarding undisclosed high commissions. Claims management companies and law firms continue to offer services for these specific types of claims. The PPI scandal's profound impact on consumer protection and regulatory oversight is still evident. For instance, the FCA's recent motor finance redress scheme, announced in March 2026, is explicitly being compared to the PPI scandal in terms of its scale and the systemic nature of consumer harm it addresses, highlighting a continued focus on business models that create conflicts of interest and lead to unfair customer outcomes. The FCA's 2026 regulatory priorities for the insurance sector also emphasize improving consumer understanding, claims handling, and service quality, reflecting lessons learned from past mis-selling events like PPI.
What If...?
Explore alternate histories. What if Payment Protection Insurance (PPI) made different choices?