What is PPI apart from 3 letters we’re all tired of seeing?
PPI stands for Payment Protection Insurance. Companies sometimes called it:
- Accident, Sickness and Unemployment cover (ASU)
- Life & Accident, Sickness and Unemployment cover
- Mortgage Payment Protection Insurance
- Personal Loan Protection or
- Credit Card Repayment Protection.
What is PPI for?
Consumers are still asking “What is PPI?”. If you’re not sure or don’t fully understand, read on. Lenders (banks, credit card companies, store cards, mortgage providers etc) and others sold PPI for many years. PPI should have covered credit card, store card, loan or mortgage repayments in some circumstances. For example, if an accident, sickness or unemployment prevented the customer from making their payments.
If you got a credit card, store card, loan, hire purchase agreement, finance on a car, or a mortgage, the lender may have added PPI. There is nothing wrong with correctly sold PPI for those who need it.
So what’s the problem with PPI?
In many cases companies mis-sold PPI because they did not follow the rules. There are lots of ways that PPI was mis-sold. In some cases, the people selling the PPI did not make it clear that they were selling an insurance policy on top of the credit.
For example, many store cards had PPI added, but this was automatic and unless you read the small print whilst standing at the till and unticked the box, you started paying for PPI.
In other cases, the saleperson may have said that it was compulsory or that you would have a better chance of getting credit if you took the PPI.
Sometimes the PPI policies were simply not suitable. Perhaps this was because customers did not need the insurance cover or because, for various reasons, the policy would not have helped them in practice.
In addition, commission on PPI policies was often very expensive. In some cases over 70% of what customers paid for PPI went as commission to the company who sold it. These companies often did not tell customers how much the commission was on PPI. As a result, the courts have ruled that this alone often made the contracts unfair. Hardly a surprise!
If you had PPI (and remember you may not have known) and were mis-sold, you can re-claim the cost with interest.
We may be able to re-claim £1,000s on your behalf. We can get into bother if we bandy about figures, but according to the government-run independent Money Advice Service, the average is about £3,000. It all depends on how much your credit was for and how long it is since you took out the PPI.
The financial services regulator (the FCA) is now almost certain to introduce a PPI deadline for claims, so finding out if you are one of the people owed money is becoming more urgent.
How do I know if have PPI?
First, check whether your credit or store card statement, loan agreement or mortgage documents mention PPI. It could also be called one of the similar names we gave above. In many cases, people do not realise that they have paid for one or more PPI policies. Perhaps you don’t have documents or you’re not sure. In that case, don’t worry, just fill out the form and we’ll help you find out.
If it turns out you don’t have PPI, it will have cost you nothing. But if you do and have been mis-sold you could be owed a substantial amount of money.
How would I know if I have been mis-sold PPI?
A good sales process for PPI would have:
- fully informed you of the costs;
- made sure you knew that the policy was optional;
- not suggested that you needed PPI to get credit and;
- that you could buy PPI elsewhere if you wanted.
The person selling the PPI should also have checked it was suitable for you by asking about:-
- any pre-existing medical conditions you may have had,
- your employment status,
- and many other things.
If you want to get help we can check all of this and more to see if you could get compensation. We can handle re-claiming PPI for you and even take your case to the Financial Ombudsman Service (FOS) if needed. This step is still proving necessary. Moneysavingexpert commented recently that the Financial Ombudsman Service (FOS) found in favour of consumers in around 70% of complaints they looked into. For the worst companies that figure is actually 98%! That indicates that the banks are still not getting it right in many cases.
Our service costs nothing up front and is on a no win, no fee* basis. Our fee of 15% + VAT (18% total) is one of the lowest anywhere (compare to other companies here) and you’ll find us reassuringly no-nonsense.
image credit: Dom J @ Pexels