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If you have ever taken out a payment protection policy with HSBC or any other lender you have probably seen the media coverage regarding the PPI mis-selling scandal. Many people are confused about what PPI is and how to go about claiming compensation.

You may have purchased a HSBC PPI policy with a credit card or loan. There are many common issues surrounding these policies and their sale, but it is valuable to look at them as three distinct products.

Credit card PPI is usually calculated on a month to month basis. The total the customer pays for the cover will depend on the balance of their account each month. Credit card PPI is usually worked out at a rate of approximately 79p per £100 outstanding. If the customer’s balance is at zero they would not normally pay anything if; however, their balance was, for example, £5,000 they may pay around £39.50 per month for the cover. The real issue regarding HSBC PPI for credit cards and other similar types of credit card PPI is that the cover can have quite low payout rates. A 2008 investigation by the Competition Commission found that just 11% of people who tried to use their credit card PPI policy were successfully able to do so. This means that as many as nine in every ten people who have credit card PPI may have a policy they are unable to use.

In the past credit card PPI was sometimes sold as an ‘opt out’ extra. This means that customers would have to tick a box on an application form to say they did not want the cover or it was added automatically.

If you are unsure whether you have HSBC PPI on your credit card check a recent statement or your original credit card agreement forms.

Loan PPI is usually charged as a lump sum. The cost is ordinarily added to the loan amount so the customer repays the PPI and loan costs back together in monthly instalments. The cost of loan PPI can vary considerably, but usually falls between 13-25% of the base loan value. On a £5,000 loan, therefore, a customer may pay in the region of £650-£1,250 for payment protection cover. The PPI will also attract interest at the same rate as the original borrowing. Like credit card PPI, loan PPI also has quite a low pay out rate. The same 2008 survey by the Competition Commission found just 15% of people who tried to use their loan PPI policy were successful in doing so.

If you think you may have been mis-sold a HSBC PPI policy you have the right to make a complaint. It is estimated that HSBC has sold a total 1.25 million Payment protection policies and the lender has recently allocated £270 million to compensate customers who have been mis-sold cover. To find out more call our team today on 0207 471 2000.

We can also assist you in claiming back bank charges. A 2006 investigation found that many lenders had charged fees for over the limit charges and late payments that were unfair. If you have paid these fees in the past you could be entitled to claim hundreds of pounds in compensation.

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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit 16, Elysium Gate, 126 New Kings Road, London, SW6 4LZ and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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