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PPI – What’s all the fuss about?

Filed under: Services — Tags: , , , — consumerfinanceclaims @ 11:20

Payment protection insurance (PPI) is a form of insurance designed to take over loan and credit card repayments in the event of you being unable to do so due to accident, sickness or redundancy; however personal protection insurance has been very much under the spotlight over the last couple of years because of concerns over the way it has been sold by some providers.  As a result of this investigation, a number of banks have been fined by the FSA  while the Competition Commission is in the process of introducing new rules on how payment protection insurance can be sold in the future.

One of the main changes that were implemented recently has been the prohibition of the sale of single premium PPI; what that means is in the past when you took out a personal loan policy and if you took PPI at the same time, the cost of the insurance policy was added to the loan amount, and you effectively ‘borrowed’ a lump sum on top of your loan to pay for the policy, with interest and the same early settlement charges that applied. This meant the insurance premiums can add between 13%-56% to the total cost of the loan.  Many lenders took action to actually stop selling single premium payment protection insurance as soon as they saw the writing on the wall and switched to monthly repayment policies which are much fairer on the borrower.

With a monthly repayment policy there is no reason why at any stage you should not be able to stop the policy; it’s not like home insurance or motor insurance  which in most cases is mandatory, it is merely an add-on on top of the loan.  If at any point your circumstances change, perhaps you get a better paid job or a more secure job, you can then cancel the policy.

One of the reasons why PPI has been under the spotlight has been because of concerns over the way it was sold; policies tend to include a number of exclusions amongst the fine print. For example the insurer may not honour your claim if you’re self employed or if you are a housewife or student, things of this nature. Certain medical conditions are excluded. Other mis-selling techniques included;
• Adding the cost of the payment protection insurance without the customer’s knowledge or consent.
• Telling the customer that PPI is compulsory.
• Not asking the customer about previous medical conditions that means the PPI is worthless
• Not asking the customer about their employment status which means the PPI is worthless

It is important therefore, before committing yourself to any PPI, to read carefully the key policy information. This will explain in detail, the main features and benefits of the policy, and how long the insurance protection lasts.

It is calculated that over 90% of all payment protection insurance policies issued have been mis-sold, with the result that many UK loan and credit companies have been fined.
So is reclaiming PPI a good idea? In my opinion yes it is. A PPI reclaim would lead to a large cash refund including interest and could help reduce your debts. If you require cover then we suggest purchasing it from an alternative provider.

For expert advice, personal service and competitive rates contact us now by filling in our online enquiry form www.consumerfinanceclaims.org.uk






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Congratulations! You're one step closer to receiving your compensation for mis–sold Payment Protection Insurance.


If all details look OK you will receive a Claim Pack through the post, usually within 48 hours. If there are any issues we need to discuss one of our advisors will call you.


Either way you need to return your Pack as quickly as possible to prevent any delays with your claim!