Payment Protection Insurance (PPI) has been heavily pushed alongside loans for the past 15 years, and lenders tend to make more money from selling PPI than they do from the actual loan.
Fortunately however, selling PPI insurance to consumers who were uninformed became illegal in May 2009 after being heavily opposed by consumer groups and the Citizens Advice Bereau. Because of this, anyone who has been sold PPI insurance is entitled to reclaim their money and claim compensation, with interest added on.
If you have taken out a personal or secured loan, or a store card or credit card, there’s a good chance that you have payment protection insurance. It has been estimated that 20 million policy-holders have been mis-sold PPI. Many of these people are completely unaware that they have been sold this policy.
Payment protection insurance is often sold with credit agreements to protect the borrower from being unable to make payments for reasons such as illnesses, unemployment and accidents.
It can be very expensive to purchase. Some policies typically cost anywhere between 15-55% of the actual credit or loan agreement. If you think that you might have been sold aspects of a policy that aren’t applicable to you, then you are probably entitled to claim PPI compensation.
If assessing whether compensation is payable, things that should be checked are medical purchases, unemployment cover, and whether or not you have consolidated your borrowing. These factors should be cross-referenced with your circumstances at the time when you took out the PPI policy; it is very common in these cases that PPI compensation would be valid.
There are several scenarios in which PPI may have been mis-sold. If you have paying for a policy that includes unemployment cover, and you don’t need unemployment cover, then you may be able to make a claim. Also, if you’ve suffered from medical problems in the past, and you were not informed that the policy might be affected by medical problems or you were not asked about your medical history, then you might be able to claim.
If you were sold a single premium loan policy, meaning that the entire insurance cost was added as a lump sum at the beginning of the agreement, and you changed it of left it part of the way through, then you might be eligible to receive a partial refund.
If you purchased PPI without realising, or you were told that it is compulsory, that is also grounds for a claim. Any misinformation would make the sale of the policy unjust.
If you consolidated your borrowing, its very possible that an insurance premium may have been added to it. If this is the case, then you will potentially be able to recover this premium.