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Credit Card PPI Claims

Payment protection insurance has received a lot of bad press within the past few years and unfortunately it appears that it will continue for some time in the future. Even though there have been major efforts by government to reform the way in which PPI is sold, credit card PPI claims are still abounding. In fact, the FSA (Financial Services Authority) has found that credit cards are amongst the most numerous types of PPI claims where other areas of the market have leveled off to some extent.

Loan Insurance vs. Credit Card PPI

In their most recent study, the FSA found that lenders are reviewing fewer loan protection insurance claims than credit card PPI claims which include such things as automobile loans, mortgage loans and personal loans. Unfortunately, bank overdraft protection insurance and credit card PPI claims are on the rise. It could be because it is easier to slip mis sold PPI past consumers when there is not one lump sum premium attached as would be the case with other types of loans.

Overdraft Protection and Credit Card PPI

By the very nature of overdraft protection and credit card payment protection insurance, it is sometimes difficult to tell that money is being deducted from the account for cover. Smaller amounts are generally assessed even though it adds up over the course of a year. For example, loan insurance can cost anywhere from 13% to 56% or more whereas credit card PPI may cost .75% monthly but over the course of a year would yield a 9% APR. Remember, there can be interest compounded on interest if nothing but the minimum payment is made each month. Overdraft protection is similar in that there is usually a standard fee per month. Since it is easier to obscure a smaller percentage, it is no wonder so many credit card PPI policies are sold. Even so, eventually consumers catch the mis sold cover and file credit card PPI claims for a refund.

FSA Efforts to Counteract Mis Sold PPI

In an effort to curb rampant mis sold PPI, government has legislated that PPI cannot be sold when a loan closes and a consumer cannot purchase payment protection for a full 14 days. This should help to reduce the number of credit card PPI claims but it is still in the early days and much too soon to tell. One thing this law will do is keep lenders from using fear tactics to sell PPI as had been so prominent in the past. They can no longer tell consumers that the loan/credit card is contingent upon payment protection because they cannot sell it to a borrower/cardholder until 14 days later. It is yet to be determined if this will have any impact on lenders adding PPI to revolving lines of credit unbeknownst to the cardholder. Future credit card PPI claims should bear witness to whether or not this type of misselling is affected by the new law.

If you feel that you have been mis sold PPI cover on credit cards, contact the claims team at Belmont Thornton, Belmont Thornton. You can call 0207 471 2000 or fill out the enquiry form on this site. A member of the claims team would be happy to speak with you about any concerns you may have regarding PPI. To date Belmont Thornton has helped to settle thousands of claims so you can feel confident that your claim will be in competent hands.

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