PPI was originally supposed to be a policy that is to be willingly purchased by a buyer if they want to have a secured and steady source of income in case they lose their work due to unforeseen circumstances and are unable to make repayments towards their loan, mortgage or credit card bills.
However, the entire essence of the policy vanished once most of the financial institutions and banks in the country started to make it a filthy business, which only led to the fulfilment of the lender’s greed.
This happened at the cost of the buyers’ ignorance or innocence. PPI was sold in an unethical way to the customers just so that the lenders could earn more and more commission from the policy. However, as soon as the affected customers came to know about this mis-selling of PPI, they started claiming back their funds from the financial institutions which sold them the policy.
What is a Goodwill Payment?
The financial institutions have a reputation to maintain. It would obviously be a matter of shame for the institution if everyone comes to know about the fact that it mis-sold the policy to the customer for selfish needs. Thus, any financial organisation that used fraudulent techniques to sell PPI adopted the policy of “goodwill payment”.
This refers to the situation wherein the financial institution is ready to pay the compensation to the affected PPI buyer, but the institution never admits that it did anything wrong. They try to prevent the complaint made by the customer from escalating and going further, and shut the customers’ mouths with money. This is seemingly never the correct way of settling claims of the affected buyers.
Is Accepting A Goodwill Payment A Good Thing For PPI Complainants?
However, this is a case worth pondering upon. Most customers have very little knowledge about the value of their policy and the amount of compensation they are to be paid by the lenders. They will accept any payments if the lender is successful in making them, believe that it is genuine and that they know the complaint will harm the lender’s reputation if it goes further.
However, there is also the possibility of the complaint being be stuck with the financial organisation if you try and follow the official procedure. Be it an overload of complaints, a huge amount to be remitted as compensation or simply an excuse by the banks, you will always find a delay and inefficiency in your complaint being duly taken care of. There are several chances of you not receiving the full amount of your compensation, or not receiving it at all. So, if you look at goodwill payment from this point of view, it seems a more feasible option than going through the traditional procedure.
There have been many cases in which the lenders pay a lesser amount of money to the customers than the original compensation and waive off the complaint before it goes further. This might sound unreasonable when you hear about it the first time, but it might make sense when you know that following the official procedure may take much longer. The State hasn’t made goodwill payments illegal. In fact, it is useful for people who need the money urgently. Moreover, according to the norms, the amount of goodwill payment also depends on the customer’s discretion. If the customer is not satisfied with the goodwill offered, he can still complain to the Ombudsman.
Hence, there are two sides of receiving a goodwill payment by the lender, and both are reasonable in their own ways. It is always your call to make a final decision!