Payment protection insurance (PPI) is a type of insurance policy that is designed to cover loan or card repayments in the event of an accident, sickness or unemployment. The extent of any cover your PPI policy provides will depend on the type of PPI policy you have in place.
When correctly advised of the benefits of Payment Protection Insurance and when a policy is taken out under proper guidance, having an adequate PPI policy in place could help to provide you with added reassurance in difficult circumstances by helping you stay on top of your repayments.
Unfortunately, a number of consumers have been falsely advised when taking out PPI and, in some cases, are not
even aware that they have agreed to a Payment Protection Insurance policy.
There are approximately 20 million Payment Protection Insurance policies in the UK, generating about £5billion a year for the companies involved. However, it isn't the insurance companies that reap the rewards, but rather the companies selling the loans.
Why PPI is so often Mis-Sold?
The sellers of PPI have a responsibility to ensure that you understand the nature of the product and that it is appropriate for you. All polices have certain exclusions and you should have been told about them. As most policies are taken out along with a loan or credit card, rather than standalone, the key is what was said at the point you were sold the policy.
These are the most common reasons for PPI policies being mis-sold:
- Was it implied or stated that the loan would be more expensive if you didn't take the insurance?
- Was it implied or stated that you you were required to take out their policy to qualify for the product or help with your application?
- Was the salesperson pushy when selling the product so that you felt you couldn't say no?
- Did the salesperson require you to sign the insurance agreement before you could continue with the loan application?
- Did you already have insurance cover?
- Have you tried to cancel your policy?
- Is the insurance term too short?
- Do you have a joint loan but the insurance is only in one name?
- Were you self-employed, unemployed or retired?
- Had you had medical problems in the past?
If your situation is in any way similar to any of the above scenarios, you may have a claim for recovery of any Payment Protection Insurance premiums paid together with interest and other costs. This means you stand a good chance of getting most of your money back.
If you have an inappropriate PPI product and weren't told it was inappropriate or you don't think you were given the full information on what the policy would and would not cover,
contact Legal Advice Helpline to speak to one of our specialist PPI advisors.
What to do if you were Mis-Sold Payment Protection Insurance?
Firstly, check your policy agreement. Then if possible, obtain a copy of your PPI policy's terms and conditions. If you are unable to locate the agreement, contact your lender to ask for a copy (but make sure it dates back to the time of your agreement as terms will change over time). Lenders can ask for £1 to provide this but not all do so you could include a cheque for £1 (don't send cash though) to speed it up a little.
The Financial Services Authority (FSA) has fined several major providers for not treating customers fairly and wants to see better practice across the sector. If your provider has been fined, it's very likely you have a case to reclaim the monies owed to you.
A number of well-known companies have been fined under the PPI mis-selling rules including:
- Swinton
- Egg
- Alliance and Leicester
- Liverpool Victoria
- Land of Leather
- HFC Bank
- Capital One
- GE Capital Bank
- Regency Mortgage Corporation
- Loans.co.uk
- Blackhorse
- Redcats
- First Plus
- Welcome Finance
- Home and County Mortgages
If you bought your loan or credit card online, reclaiming can prove more difficult as the full terms and conditions are usually available to view online. However, an exception to this is if you purchased from a lender using pre-ticked boxes, meaning you had to opt out of the insurance rather than opt in.
In fact, from July 2007 all lenders agreed to stop doing this but if you took out an agreement before this date check your policy for insurance.
You can reclaim on policies dating back as far as six years, so if your policy started in the last six years, whether you are still using it or not, you can reclaim the monies paid if you feel that the policy was mis-sold in any way.
If your policy started more than six years ago, whether you are still using it, it ended within the last six years or it ended even longer ago, you may still be able to pursue a PPI claim. Contact Legal Advice Helpline to speak to a PPI specialist for further information.
How to reclaim Payment Protection Insurance premiums?
Legal Advice Helpline has experienced solicitors who will deal with your PPI claim for you, from assessing your case to completion and reclaiming the money you are rightfully owed. Contact Legal Advice Helpline on 0800 612 3042 or
click here to make a PPI claim now.