PPI MBNA
The media storm surrounding payment protection insurance has been difficult to avoid in the last few years. Several lenders have been handed large fines, more than 1.5 million people have made a complaints and now the British Banking Associations has lost its High Court battle with the Financial Services Authority. It has been a dramatic fall from grace for an insurance that, for many years, was seen as a cash cow for lenders generating in excess of £5.5 billion a year.
Payment protection insurance is sold alongside loans, mortgages and hire purchase agreements, but it is credit card PPI, such as PPI MBNA, that is often highlighted as representing particularly poor value for money.
Credit card PPI can be expensive, particularly if you have a significant amount of credit card debt. Many people do not realise this when they decide to take up the cover; however, as it is often charged at around 79p per £100 outstanding on the balance - which seems like a very small amount. If you owe just a few hundred pounds this is not an issue, but if you have a larger debt the cost of PPI can mount up. For example if you owe £20,000 on your credit card, you may pay around £158.00 per month - that equates to £1,896 over the course of a year.
The second issue with credit card PPI is the reported low rate of payouts. A 2008 Competition Commission survey found that just 11% of customers who tried to use their credit card PPI policy were successful in doing so. This means that almost 9 in 10 credit card PPI policyholders may be paying a high price for something they may never be able to use.
When you took out your credit card PPI policy your lender should have explained, in detail, the cost and the terms and conditions of the cover. If you did not receive this information you may be entitled to receive payment protection refunds. For assistance with making your PPI MBNA claim call our team today on 0207 471 2000.
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