Payment Protection Insurance (PPI) is one of the most complained about financial products.
Statistics published by The Financial Ombudsman Service (FOS) show that there was a 15% spike in the number of complaints being escalated for FOS mediation in the second half of 2010.
While this increase was across the board and for all financial products, PPI headed the list of products receiving most complaints.
What Exactly is Payment Protection Insurance (PPI)?
PPI is also known under other terms such as loan insurance and mortgage protection insurance, and was systematically sold to clients taking a loan, mortgage or using credit cards. The policies were intended to protect the financial consumer in the event that their ability to keep up with loan repayments changed.
The reality is however very different, the security it was designed to extend rarely worked and the scale of mis-selling is huge.
How Was PPI mis-sold?
There are a huge range of reasons why PPI was mis-sold and include some of the following reasons:-
- Consumers were told it was mandatory
- that the loan could not be offered without cover
- that their chances of securing the loan was based on their acceptance of taking up a policy
- Or that they were not allowed to find alternative and more competitive PPI cover from other providers.
To add to this, exclusions and the full Terms & Conditions were often not fully explained. PPI excluded large demographics such as the unemployed, the self-employed, those suffering from long term health issues, the retired or those approaching retirement to name but a few. These demographics would never have stood to benefit from the security net PPI was designed to provide.
The above scenarios provide an immediate snapshot of some of the most common cases where PPI was mis-sold.
What Can I Do If I Think I Was Mis-Sold PPI?
Thanks to growing media coverage and widespread acceptance that PPI was grossly and systematically mis-sold, more and more individuals and PPI claims companies are rightfully gaining compensation for contributions made to mis-sold PPI.
As an individual, you can approach the bank or lender and make a formal complaint to investigate if you were mis-sold PPI. Key to successfully claiming back PPI is gathering all the information you have. At the time of writing, the British Bankers’ Association is seeking a judicial review on how PPI complaints are processed and the timescale to completing gaining compensation has been lengthened. Using PPI claims companies can help individuals claim compensation for mis-sold PPI as their expertise allows them to quickly cut through any banking bluff and rhetoric when confronted by a genuine application for compensation.
If you were ever mis-solved PPI, then good luck in getting it resolved.
If not, don’t be discouraged by the abundance of misleading financial claims. Just keep saving, spend smart, and be sure to look for the small print! And remember, if you ever have any questions related to anything you see on Magical Penny I’d love to help -just send me an email to adam AT Magical Penny Dot Com.