Payment Protection Insurance (PPI). What’s it all about?
More often than not, the first question a prospective client asks us is “what is Payment Protection Insurance (commonly called PPI) ?” Quickly thereafter a second question – “Do I have this?”
In a sentence, PPI is an insurance policy that is intended to cover loan or financial repayments if you are unable to do so.
The policy might not be called PPI, and could be called loan protection, credit insurance, accident insurance or many other names. The intention of these policies is to cover loan payments following certain specified events - commonly loss of employment, sickness or death, although each policy will have its own terms and conditions.
Many people simply don’t know whether they have PPI cover. In part this is because of the numerous names given to such policies, but also in many cases it was sold with the loan without the consent or knowledge of the consumer.
It is always worth checking your documents to see if you have this cover. Additionally you might want to ask your bank, credit card or loan provider if you have or have ever had such a policy. They should answer such an enquiry honestly and promptly.
Turn on a television set, or open a newspaper and you will inevitably see an advert about recovering the cost of mis-sold PPI cover.
It is probably fair to say that in so far as consumers are concerned, PPI mis-selling is the greatest financial scandal of the 21st century. According to the Financial Ombudsman Service (FOS), 78% of the complaints they received during the 2013/14 year related to mis-sold PPI policies. In numbers that is almost 400,000 cases of alleged mis-selling.
At its peak they were receiving 12,000 new complaints a week. This is an unprecedented scale of complaints and the FOS say their response has been to increase case workers at a rate of 1000 per year since 2012/13 to deal with this deluge of complaints.
In 2010 there were less than 50,000 complaints made to the FOS. The number has grown markedly ever since to the peak figure last year.
If the statistics are anything to go by then clearly consumers are becoming more aware of their right to claim a refund. However, just because you have a PPI policy does not mean that it was mis-sold in the first place.
In their guide to PPI insurance the Financial Conduct Authority (FCA) details a number of reasons why consumers might believe their policy was mis-sold. These are:-
· you were pressured into taking out PPI;
· it was not made clear that PPI was optional;
· you were advised to take out PPI but it was not suitable for you;
· you thought buying PPI was a condition, or would increase your chances, of obtaining a loan or other type of credit;
· any significant exclusions were not explained, such as being self-employed or pre-existing medical conditions;
· the policy was added to your loan without your knowledge;
· it was not made clear that you would pay interest on the cost of PPI if it was added to the loan; and
· it was not made clear that the PPI cover would end before the loan or credit was repaid.
This list is not however exhaustive and there may be other reasons why PPI was mis-sold. So, to emphasise, you do not have an automatic right to be refunded your premiums. This will only follow if you can establish you should never have had the cover in the first place.
Even if you have successfully claimed on such a policy, this is no defence to a mis-selling claim. If the cover was mis-sold, it was mis-sold. Further, under the FCA rules that cover all banks and similar institutions, these service providers must “treat customers fairly.”
When it comes to PPI, a client complaining about mis-sold PPI or requesting a refund should not be prejudiced by seeking recompense for a product they should never have been sold in the first place.
The bank should also deal with the claim promptly and fairly. If you think about this from another perspective – it is the bank/loan provider that has treated you unfairly in the first place by selling you a product you should never have had. If it were unwanted or unsuitable tangible goods we were considering you would take them back to the shop for a refund. Why not take back an insurance policy?
Here at Optimal Claim, we are experienced at progressing claims for recompense due to mis-sold PPI products.
Because we speak your language we are best placed to provide you with clear advice about whether a claim can be made. If you want to know more, then please contact us without obligation. We will even check your papers for you should that be required, at no charge to you.
If a claim can then be made, we accept cases of this type on a “no-win, no-fee basis,” which gives you the comfort of knowing we will not charge if your claim is unsuccessful.