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PPI Protection

PPI is an abbreviation for payment protection insurance. This type of insurance is commonly sold alongside mortgages, loans, or credit cards. PPI protection is supposed to make the payments to a loan, mortgage, or credit card in the event the borrower was not capable of working as a result of being sick, injured or involuntarily made unemployed. However, the cover doesn't always work as  as it should.

What Is the Problem with PPI?

PPI protection as defined is a good thing, but the problem occurs more often than not in the selling process. This CAB (Citizens Advice Bureau) filed a major complaint against PPI citing it as being one of the 'biggest protection rackets' of all time. Shortly thereafter, the FSA (Financial Services Authority) and the OFT (Office of Fair Trading) made public statements to inform the public that there may be numerous people that had been potentially been put at risk of being mis-sold PPI protection. As the public started to understand the statements made by the OFT and FSA it made people think about whether or not they had been mis-sold and whether or not they were able to file a PPI claim.  Since the release of the statements, the numbers of complaints have hit record highs. 50,000 people in the year 2010 file PPI complaints, breaking last year's record of 30,000 easily and almost doubled it.

Who Was Mis-Sold?

Considering that the problem has reached epidemic levels, many citizens just want to know how this could have happened. PPI protection was at one time regarded as the best thing that lenders could do for borrowers, but it quickly fell out of favour after it was revealed only a small amount of customers may actually be eligible to make claims. This led to massive outcry from policyholders who felt as though they were treated unfairly. The Financial Ombudsman Service (FOS) let consumers know that to qualify for a PPI protection refund one must be able to prove that the PPI was mis-sold. Below is a list of common ways in which PPI was mis-sold.

  • Lenders telling borrowers that loan insurance was necessary.
  • Lenders wrongly informed borrowers that if they got payment protection it would improve their chance of receiving either the loan or credit card.
  • The lender sold cover to a borrower who already had payment insurance with another company or was entitled by their employer to sick pay and therefore didn't need it.
  • The borrower being a full-time student, retired, or unemployed at the onset of the policy and should never have been sold cover.
  • The lenders failed to walk through the terms and conditions with the perspective client.

Any of the above aforementioned reasons, may entitle a policyholder of PPI protection to financial compensation.

How to Get Back Money Lost with PPI

There are numerous companies that are willing to help with regaining money lost with PPI protection. These companies are called PPI claims companies. The purpose of these companies is so that policyholders who feel as though they need additional help in receiving a refund can receive it. Some of these companies  work on a no-win no pay basis. Either way, you should check with the Ministry of Justice as to which one has the best credentials relating to your specific case.

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