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PPI Investments

Believe it or not, anyone who has been mis sold payment protection insurance has just become an unsuspecting participant in PPI investments! However, the underlying concept is a little blurred unless you understand that the initials 'PPI' can stand for two different and seemingly diverse products. Even so, they are closely related in the context of having been mis sold payment protection under the guise of insurance cover but were really investing in the insurance company without the hope of realising profits on your PPI investments!

Payment Protection Insurance vs. Private Placement Investments

Clearly both have initials that are exactly the same yet seem like they are two totally different things at first glance. One appears to be an insurance product while the other seems to be an investment product. Actually they can be one and the same, and are in fact one and the same when it comes to the payment protection scam that has infiltrated the UK. We have all heard the news that literally millions of UK consumers are seeking payment protection refunds for having been mis sold PPI, but perhaps aren't clear that those premiums went forth as PPI investments in the insurance companies underwriting the cover! Payment protection insurance then is financed by Private Placement Investments, namely your hard earned money that was taken from you under the guise of PPI cover on loans.

Taking It Back a Step

Private practice investments are generally made in such financial entities as insurance companies and the investor receives profits for his or her PPI investments. In return for investing in a given insurance company the PPI investors either own shares or more commonly, trade in securities. In any case, the investor hopes to realise a profit. Payment protection insurance on the other hand is cover sold to those taking out loans and it is intended to provide cover if the borrower is unable to make loan payments. What most of us don't realise is that the money we have been tricked into paying for this cover is actually financing the insurance company that underwrites the cover!

The Lender's Role in PPI Investments

Traditionally, private lenders finance private PPI investments which exclude banks and any companies traded on the open market. As a way of financing insurance companies without actually purchasing stocks or securities, publically owned lenders have mis sold PPI cover and that money takes the place of an investment. Whilst the insurance company doesn't play an active role in mis selling PPI, they make a profit right along with the lender and the policyholders are left out in the cold. As more and more consumers in the UK are becoming aware of the fact that they either can't use the cover that was promised to them or that lenders tacked it onto their loans without their knowledge, there is a major increase in the amount of payment protection insurance claims against those lenders.

What this boils down to is the little known fact that lenders have mis-sold PPI cover to consumers who can least afford it, will never get to use it and will continue paying for as long as the loan is active. PPI investors in the traditional sense, on the other hand, willingly participate in hopes of making some money. Both invest in insurance companies, but only Private Practice Investments ever get to realise a profit. If you have been mis sold PPI you probably won't make a profit but you can certainly file through Belmont Thornton to try to get your money back. To begin reclaiming PPI call 0207 471 2000.


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