Payment Protection Insurance
What is Payment Protection Insurance?
Payment protection insurance or PPI is essentially a form of cover that helps the policy holder in the event of being unable to meet repayments to their creditors each month. PPI covers the holder in the event of being unable to earn money through illness, sickness or an accident through no fault of their own.
Payment protection insurance works by covering the holder against the policy they have applied for, for example if you apply for a credit card or loan you may take out PPI to act as insurance against any difficulties that may occur through the life of the policy.
Do you have Payment Protection Insurance?
PPI usually comes in two forms of payments to the policy holder, it is either added to a loan in the first initial agreement or as a monthly premium on a credit card so working out whether or not you have PPI cover should be as easy as checking your paperwork, alternatively you can give your bank or lender a call.
PPI Claims and the mis-selling of PPI
Though payment protection insurance is a cracking product if it suits you, but if not you can find difficulties in trying to claim. Banks and lenders in the UK have been fined millions of pounds recently for the mis-selling of the controversial product and ordered to compensate any customers who make fair PPI claims against them. We are not talking about only the small banks, the high street names such as Alliance & Leicester and Lloyds are part of those who have been found guilty of selling PPI to those customers who did not need, suit or actually wanted the product.
Was PPI mis-sold to you?
The financial governing bodies in the UK estimate that millions of PPI polices have been mis-sold over the last ten years, it has been mis-sold to unwilling customers of banks who were wrongly informed about the product or even did not know that it was added to their account.
If you have been mis-sold PPI you could make claims against your lender to get all of the premiums you paid plus interest compensated. You have been mis-sold if:
- You were told by the bank or lender that having PPI on your account would increase your chances of being accepted
- The bank or lender did not inform you about the policy exclusions including stress and back related problems
- The bank or lender did not inform you that PPI was optional and it could be bought elsewhere
- you were retired, self employed or un-employed at the point of sale
If any of the above apply to you then you could be eligible to make PPI claims against your lender or bank, the average customer can reclaim £3000 in PPI, with a combination of loans and credit cards most people have between 2 and 3 claims per person.