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Barclays Mis Sold PPI

After so much media coverage more people than ever are now aware of the Payment Protection Insurance fiasco, but there is still a lot of confusion over what constitutes mis-selling and how unhappy customers should go about making payment protection insurance claims.

It has been found that Barclays mis sold PPI along with most other lenders, but how was the scandal exposed and how do you go about making your claim?

In 2005 The Citizens Advice Bureau (CAB) highlighted several issues surrounding Payment Protection Insurance. The cover, often known simply as PPI, is supposed to cover customers who are unable to keep up debt repayments as a result of redundancy, sickness or accident. The cover has been sold for more than 30 years and cases have been uncovered where Barclays mis sold PPI on mortgages, loans and credit cards. The issue is not confirmed to major lenders, though, and many smaller brokers and even some independent financial advisors have been found to have mis-sold the cover.

The CAB investigation settled on three main areas of concern surrounding PPI: that it was expensive, that it offered low levels of cover and that it was frequently mis-sold.

The cost of PPI can vary quite considerably. As a rule it may cost between 13% and 25% of the base loan value. The CAB found one extraordinary case, though, where a customer was charged 56% of the base loan value for insurance. On a £10,000 loan this would add £5,600 significantly increasing overall debt. PPI also attracts interest at the same rate as the original loan. This really becomes an issue when the full costs are not made clear to the customer. Often the PPI charges are added to the monthly instalments making it difficult for the customer to know how much is the original loan, how much is interest and how much is PPI. Most lenders, at one time or another, including Barclays mis sold PPI in this way.

The second issue relates to the level of cover provided by the policies. Clearly if the cover is very expensive compared to the original loan the customer is financial disadvantaged. Even if they do make a claim for financial help from the policy, it would be unlikely they would ever recoup all the money they have paid in. In addition, the average payout for this kind of insurance is very low. An investigation by the Competition Commission found only 15% of those who try and use their loan PPI policy are successful, while for Mortgage PPI the figure is 28% and credit card PPI just 11%!

There are a wide variety of ways in which lender including Barclays mis sold PPI. Common examples include the terms and costs not being explained or customers being given the wrong information – E.g. taking the cover would improve their chance of being given the loan. PPI was also often sold to people whose circumstances made them unsuitable, for example because of their age or employment status.

To start your claim today call our team on 0207 471 2000. We have already helped more than 60,000 customers and will guide you through each step of the process. We also assist customers to reclaim bank charges unfairly applied for credit card late payment or over the limit fees.

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