Do you know if you have been mis-sold Payment Protection Insurance (PPI)?
PPI Claims in a Nutshell
But what exactly is Payment Protection Insurance and why would you make PPI claims? Well, PPI is an insurance policy sold along
with a loan, to reassure the borrower that if he suffers a loss of income, for instance through illness, accident or loss of employment, then he or she will still be able to meet the repayments on the loan. This is a laudable motive on the face of it.
Except that most PPI policies would never be claimed on, as the majority of people do not suffer a loss of earnings during the course of the few years of their loan. Yet the cost of the PPI would still have been typically 15%-25% of the cost of the loan (which is unnecessarily high), making this type of insurance extremely profitable to the lender, for instance if only 2-3% of borrowers would actually try to claim loss of earnings.
Yet to pour oily sales patter on troubled waters, most PPI policies were mis-sold, in a number of different ways. The list of ways is too long to reproduce here, but they might have involved
- Persuading the customer to sign up for the PPI in order to get the loan approved.
- Pay up front for the PPI.
- NOT to be told that they could shop around for the PPI cover, or to pay (and indeed to pay over the odds) for a PPI policy from which they could not actually benefit.
- People who were self-employed
- Too young/old to qualify for the insurance, the idea of making a PPI Claim would, unknown to them, be academic.
However, people who were seemingly eligible for the PPI were still very often mis-sold PPI policies in a number of other ways.So, in short, a PPI claim is a claim to maintain repayments on a loan, through a separate, very over priced loss of earnings insurance policy, and for which the borrower may not be eligible to make a claim, and which, even if they are eligible, has very likely been mis-sold on at least one of the grounds possible, through use of high pressure sales techniques.