The deadline for claiming PPI is exactly one year away and after 29th August 2019, individuals will no longer be able to claim mis-sold PPI.

Payment Protection Insurance (PPI) was sold as an add-on for loans, mortgages and other financial products to help pay for any outstanding debts if you became sick or injured. However, it emerged that policies that included PPI were void and did not cover or add any value to the individual. As a result, the Government decided to refund everyone who had purchased PPI, giving them the right to a significant rebait in the region of a few hundred or thousand pounds.

With the UK banks putting aside £35 billion for PPI compensation, the industry quickly became big business and even today, one will notice PPI refund advertisements on the train, buses, radio and television.

However, the rapid demand of the product has created a huge claims compensation industry, which has subsequently led to aggressive cold calling and bombarding of emails and text messages. With the Financial Ombudsman Service (FOS) receiving around 3,000 complaints about PPI per week, the FCA finally put a deadline in place for all claims to be made - using Arnold Schwarzenegger as the face of their TV campaign.

With PPI claims coming close to an end, claims companies in the UK are looking for new industries to capitalise on and have set their sights on the rise of compensation claims in the payday loans industry

Claims companies are looking to help individuals recover legacy loans - ones that were taken out several years ago. Several payday loan borrowers were granted loans that they could not afford to repay, but they were still given funds by lenders potentially looking to add late charges and default fees. As per FCA regulation, all lenders providing consumer products must assess affordability through income and credit checking - and those that have not are liable to provide refunds.

In fact, Wonga.com has refunded over 300,000 borrowers in the last 4 years, which has come at a cost of £220 million. Earlier this week, the company received a £10 million bailout by its original investors to save the company from going into administration.