Have I Been Mis Sold PPI
Payment protection insurance (PPI) is perhaps the most undeserving name out of any insurance type as it does not provide protection for the majority of policyholders. This is because lenders often mis-sell PPI policies to desperate borrowers in an attempt to earn additional profits through commissions and heightened interest payments. The fairly prevalent mis-selling of payment protection insurance policies in the UK is caused by a mixture of greed and the marketing of biased misinformation. While the majority of policyholders receive a full PPI refund with the assistance of The PPI Claim Company, consumers that decide to file a claim against the policy itself have less than a 15% chance of receiving benefits. If you've been asking yourself "Have I been mis-sold PPI?" consider the following related questions.
Have I Been Mis-Sold PPI so That a Lender Could Earn a Profit?
Each time a PPI policy is sold the lender that performs the underwriting receives a set commission from the insurance company. While this commission is usually larger for single PPI premiums that are charged upon loan signing, the lender also increases their profits by including the cost of the PPI policy within the overall amount to accrue interest with the original loan amount. In addition, some PPI policies cost as much as 50% of the total loan amount. In other words, a £10,000 unsecured personal loan could include a PPI policy that costs £5000, which would make the true value of the loan only £5000. Luckily, authorities in the UK have been fining major financial institutions millions of pounds for PPI mis-selling, and there is hope for the average consumer.
Have I Been Mis-Sold PPI against My Will?
Lenders that offer PPI policies in conjunction with their financial products are required to inform borrowers that the policy is optional, as well as provide detailed information about the policy and how much it will cost. In addition, the lender is obligated to clarify the coverage eligibility requirements of the policy, and provide a brief description of coverage exclusions. According to the Financial Services Authority (FSA), lenders are only supposed to recommend policies that are ideal for the budgetary and coverage needs of the borrower, otherwise they may be held liable for providing reimbursement when borrowers begin pursuing PPI refunds.
Have I Been Mis-Sold PPI through Deceitful Tactics?
Usually lenders sell a PPI policy for an exuberant price and loan the money for the policy in order to require the policyholder/borrower to make the repayments toward the policy premium, with interest added. While doing this the lender may also fail to mention the purpose of the PPI policy, and never inform the borrower of the cost or terms and conditions of the policy. Other lenders will attempt to get away with PPI mis-selling by convincing applicants that a PPI policy purchase is either necessary for approval or will have an effect on the overall amount borrowed.
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