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Tesco PPI

Credit card payment protection insurance has for many years been a valuable additional revenue stream for banks. The cover can be expensive with charges ranging from approximately 79p to £1.50 per £100 outstanding on a balance. On a balance of £8,000 this is the equivalent of between £63.20 and £120.00 per month – that’s between £758.20 and £1,440 per year. It is not just banks and credit card companies selling this cover, Tesco PPI is also available on its credit cards.

In addition, to the cost of credit card PPI another key issue is the low payout rate. One survey by The Competition Commission found that only 11% of customer who had tried to use their credit card PPI had been successful in doing. This means that potentially almost nine in every ten customers who have a policy of this type may be unable to use it.

When the cost and payout rates are examined in this way it seems Tesco PPI and other similar forms of credit card payment protection insurance may represent quite poor value for money. This situation is not just confirmed to credit card cover; however, loan insurance policies also frequently offer poor value for money.

The typical cost of a loan PPI policy can vary between 13%-25% of the base loan value. On a £8,000 that could add between £1,040 and £2,000 plus interest. The same survey by the Competition Commission also revealed the average payout for this type of cover at just 15%.

The payout statistics are even more shocking when it is compared to car insurance which has an average payout of 79%, but why is the payout rate for this payment protection insurance so low?

Tesco PPI and most other payment protection policies have a high number of exemptions and exclusions. These are circumstances that the insurance will not cover and can range from medical conditions such as back pain to common circumstances such as relationship breakdown.

In addition, there are some groups of people who are ineligible for the cover. This often includes customers over the age of sixty-five or those with pre-existing medical conditions. Unfortunately, although they may be ineligible to use the cover, many of these people in these groups were sold the cover. In many cases these customers have in good faith paid for the payment protection cover for many years and do not find out they are ineligible for the cover until they try and use it. The good news for people in these circumstances is that they may be entitled to make a claim for mis-selling.

Mis-selling is where a policy is sold to someone in a way that can be considered unfair to the customer, for example without full information being given regarding the insurance, or, as previously stated, it is sold to someone who should not have been offered the cover.

If you believe you may have been mis-sold a policy you could be entitled to thousands of pounds in compensation. To start your Tesco PPI reclaim call 0207 471 2000 to speak to a member of the claims team.


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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website www.gov.uk/moj/cmr number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B16, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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