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Legal and General Payment Protection

Payment protection insurance (PPI) may be the most undeserving of its 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 payment protection refunds with the assistance of Belmont Thornton, consumers that decide to file a claim against the policy itself have less than a 15% chance of receiving benefits.

Legal and General Payment Protection Cost Averages

A £30,000 unsecured personal loan could include a PPI policy that costs as much as £15000, 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 a lot of consumers have been filing successful payment protection insurance claims. 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.

Legal and General Payment Protection Guidelines

Lenders or brokers 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. Statistics released by 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 payment protection refunds.

Legal and General Payment Protection Scare Tactics Used by Lenders

Usually when a lender is selling a PPI policy for an exuberant price they will pay for the policy out of their own pocket and then 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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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website www.gov.uk/moj/cmr number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B16, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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