Reclaim Payment Protection Insurance (PPI)

Have you borrowed money on a credit card, mortgage or loan? If you have then you may have been sold or persuaded to take out a policy called Payment Protection Insurance (PPI). Because of this you may be owed £1,000’s in compensation.

Payment Protection Insurance was original intended to help protect the lending companies ability to maintain their repayments should you for whatever reason fail to keep up to them. This was mainly down to ill health, loss of employment or accident.

Payment protection policies can be taken out with most forms of personal credit, which include mortgages, personal loans and even credit cards.

The problem however is from the mis-sold payment protection policies that can be made at the same time you take the credit out. The opportunity to shop around for a good price or the fact that the salesman may pressure you in to taking out PPI is very common. Salesmen are on good bonuses for selling PPI, which can in some cases make them cross the mark when pitching you the policies.

Whilst insurance of any nature can be invaluable in the right circumstances, the issue with PPI is that in some cases the policy can offer little to no benefit.

The amount of exclusions on the policy list and payment schedules are designed to maximise the profits  for the lender. This is often passed over during the initial sale which can mean that when you come to make a claim, the insurance usually doesn’t cover your needs.

With employment, the insurance usually pays out on the 60th day of unemployment – the problem is, the same banks and lenders still want their mortgage payments on the 1st of the month.  Quite frankly, PPI is a bad purchase.  Most people are sold PPI and they don’t even want or understand what they are buying at the point of sale.

Like potentially millions of other customers, you may have indeed been the victim of bad advice and mis-selling.

It is important to ask yourself:

Were the exclusions and costs made clear to you?
Were you made aware that taking out PPI is not necessary, or were you a victim of the classic salesman’s line ”Unfortunately, if you do not take PPI you will not be accepted for the loan”?

If you have cancelled or repaid your loans early, you may have had a shock.  You may have repaid more than you borrowed, although you had made many repayments towards your debt.  This is because you paid upfront for the insurance.  You don’t take out 5 years car insurance deals do you?  The reason being you like to change cars or you may have a better price the following year from another provider.  The same can be said for borrowing money.  You may have had a ‘teaser rate’ of 4.5% APR – it wasn’t made clear that you loan would then rocket to 12.5% APR.  Repayments become unaffordable and you re-do your loan – PPI is kept as it was an upfront fee and you end up borrowing more money to repay the PPI plus early redemption charges and capital.

The sale of this PPI is disgraceful and hopefully will be stamped out when the Competition Commission finally report and remedy on the PPI market.

Can I Make A PPI Claim?

The Financial Services Authority (FSA) published strict rules for the sale of Payment Protection Insurance, which the advisor must follow.  The reasons they did this is because the advisors didn’t follow any rules previously – The only rules that were followed came from their manager for “How much have we made from PPI today then?”

To help you understand whether or not you have a claim, here are a few of the reasons why you may have received bad advice – we are not joking when we list these reasons.  You may read them and think ‘that’s what I was led to believe’-

• You were told you must have PPI in order to get the loan
• You were pressured into accepting the PPI even though you never wanted it
• You were told you had more chance of being accepted for the loan with PPI
• The small print was not explained fully – especially exclusions for existing medical conditions and self employment
• The full costs of the PPI were not explained properly
• You were not told PPI was included in the loan – you didn’t even know you had it