Barclays Payment Protection Insurance
It is estimated that there are currently twenty million payment protection insurance policies in the UK. Nobody knows exactly how many of these policies have been mis-sold, but the figure could be several. Which? the consumer campaigning group suggest the figure could be around £2 million, but many fear cases of mis-selling could actually be double or even triple this number. Barclays Payment Protection Insurance policies are thought to account for between 1.6 million and 2.4 million of the UK total.
Barclays have sold PPI policies for many years alongside loans, mortgages and credit cards. The cover is supposed to insure the borrower against loss of employment as a result of illness, accident or redundancy by stepping in to cover debt repayments.
Barclays Payment Protection Insurance is applied to different types of financial products in different ways. On loans, for example, it is usually a lump sum amount which is then added to the loan. The customer will then pay slightly higher monthly instalments to cover debt repayments and the loan insurance. On Credit Cards Barclays Payment Protection Insurance is usually added on a monthly basis depending the cardholder’s outstanding balance. The cost of PPI, typically, for most lenders, is around 79p per £100. This would mean, for example, that on a £4,000 credit card balance you may pay around £31.60 per month for PPI equivalent to £379.20 per year.
One of the main issues with Barclays Payment Protection Insurance and other forms of PPI is that they do not always provide the level of protection that customers expect. An investigation by The Competition Commission in 2008 found that only 15% of people who try and use their loan PPI policy are successful compared with 28% who try and use their mortgage PPI policy and just 11% who are successfully able to gain financial help from their credit card PPI!
Mis-selling is a significant reason behind the low rate of Payment protection Insurance payouts. Because of a lack of staff training and regulation many people have a policy that is either unsuitable for their needs or they are ineligible to use. In many cases people, in good faith, make regular PPI payments for many years and do not find out they cannot use the policy until they try to use it. For many people already dealing with illness or unemployment this is a terrible blow.
Because of how widespread PPI mis-selling may have been anyone who has a PPI policy is urged to read the small print to confirm they are fully covered and are aware of any conditions and exemptions connected with their cover. Common circumstances not covered by PPI policies include: people over the age of 65 and those with pre-existing medical conditions. Other exemptions to cover often include things like back pain, stress and depression.
If you believe you have been mis-sold a Barclays Payment Protection Insurance policy or a PPI policy provided by any other lender call our team today on 0207 471 2000.
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