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PPI Illegal

Payment protection insurance (PPI), also known as loan insurance or loan protection insurance, is a type of insurance in which a loan amount or credit card balance can be covered to be paid for a specified period of time in the event that the policyholder becomes ill or unemployed. Whilst the premium is a onetime payment at the time the loan is taken out, it is for all intents and purposes, just like part of the loan. Payments plus interest are made monthly along with the loan, but the whole thing is added at the time of closing.

Unethical Lenders

The United Kingdom and other countries have had problems with some lenders and the unethical ways they have sold PPI in such large proportions that many people feel the government should declare PPI illegal. Examples of mis-selling include: knowingly signing a borrower up for this type of insurance if they were over the age of 65, not informing the client that the insurance was optional, interpreting the insurance to mean that the borrower must sign up for the coverage in order to receive the loan, or letting the applicant participate without being employed at the time of the contract.

Many Exclusions

When it comes to lloan protection insurance, one of the most frustrating aspects is the high number of exclusions. This is one of the motivating factors of advocate groups who are still working to make PPI illegal. As well, altogether too many people didn't actively choose to be covered yet the salesperson added the insurance to their loan. Sometimes salespeople purposely confused borrowers so that it sounded like something it wasn't.

Take for example a person who tells a salesperson that he or she has a pre-existing condition that periodically keeps them out of work. This person may even tell the salesperson that this cover would be perfect because they already work to make payments timely and during times when they are kept from work it becomes almost impossible. Even if they don't make PPI illegal more should be done to curb these kinds of practices.

Should you discover that you have been paying for PPI unawares or that the policy was mis sold as per FSA regulations, it is then important to document how the policy was mis sold. Once all the necessary information and documentation has been gathered, it is time to file a PPI claim. However, keep in mind that being refused cover by the insurance company does not mean that you were mis sold PPI. Some things just aren't covered! If the lender didn't violate any FSA rules when selling payment protection insurance then there are no grounds for a claim.

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