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Loan Protection Scam

If your lender persuaded you into purchasing a loan protection policy by telling you that the cover was needed for loan approval or could provide repayment assistance despite your eligibility, you may be the victim of a loan protection scam. You are not alone, as millions of consumers are mis-sold payment protection insurance (PPI) policies each year, with an estimated 14 million policies being sold since 2009, at more than 50,000 PPI claims being filed against lenders each year. Financial authorities in the UK began heavily scrutinizing and monitoring the sale of PPI policies in 2005 when the Citizens Advice Bureau (CAB) initiated a super complaint against the industry for failing to honour a decent amount of policyholders' claims and for providing a service that was not worth its exuberant cost.

How to Know If You Have Been a Victim of a Loan Protection Scam

You could be titled to a PPI reclaim if your lender did not thoroughly describe the coverage eligibility terms and exclusions for your PPI policy, or failed to adequately inform you of the policy premium. You were also a victim of a loan protection scam if you were sold a policy despite being over the age of sixty-five, under the age of 18, employed less than 16 hours per week, participating in a full-time education, or already had an equivalent policy through your employer when the policy was purchased. Individuals that were sold a PPI policy despite the eligibility guidelines should endeavour to claim back PPI payments with professional assistance as soon as possible. Almost anyone that can present evidence or adequate suspicion of PPI mis-selling should be able to claim back money spent on PPI within no more than 8 weeks.

How Much Can You Receive from a Loan Protection Scam Refund?

While the exact total will vary depending on the case details, the average PPI refund ranges anywhere from £2000 to £3000. If you are lucky enough to be within the small percentage of PPI policyholders that are granted benefits, it'll take many weeks to receive even the smallest amount of repayment assistance, so it would be much more advisable to begin claiming back PPI insurance charges rather than pursuing policy benefits. Aside from reducing your monthly repayment costs and lowering the possibility of incurring significant amounts of debt, claiming back personal loan protection can give you the funds needed to repay debts that were supposed to be covered by PPI repayment assistance.

Understanding the Motive of a Loan Protection Scam

Although we realise that greed is the motivating factor in so many PPI policies being thrust upon unsuspecting borrowers, many people still don't realise exactly what these increased profits meant to the lending industry. Banks and other lenders were providing loans, and yes they were charging high rates of interest to do so, but in the end there probably wasn't enough money to substantiate offering many more new loans. By offering an 'insurance' product that would rarely provide any benefits, the interest earned each month wasn't substantial enough to keep up operating costs let alone to finance new loans. By adding a product they would never need to pay on, or rarely at any rate, lenders could continue to do business as usual. This is the price UK consumers have paid for mis sold PPI. Bankers got big juicy commissions and yearly bonuses while hard working consumers got the shirt stolen from right of their backs.

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