Have you purchased a payment protection insurance policy within the last ten years? If you have then it is possible that your policy may have been mis-sold and you may be able to claim a refund potentially worth thousands of pounds.
Payment Protection Insurance is an insurance sold with loans, mortgages, credit cards, store cards and hire purchase agreements. It can be known by a variety of other names includes loan insurance; accident, sickness and unemployment cover and income payment protection insurance. Many lenders also have their own names for their individual products. Whatever the name, the principle and purpose of payment protection is to protect the borrower from financial hardship by insuring them against involuntary unemployment and it works by stepping in to cover repayments. In theory, it sounds like a very valuable insurance, but payment protection does not always offer the level of cover you may expect, can be disproportionately expensive and has been frequently mis-sold.
The cost of payment protection depends on the type of insurance you purchase. Loan PPI, for example, is usually calculated as a percentage of the loan amount, often between 13% and 25%, but sometimes as much as 50% and is added to your overall borrowing. Purchasing insurance in this way can mean your monthly instalments will be much higher or that your repayment period is considerably extended. The cost of the insurance will also incur interest at the same rate as the rest of your loan.
In addition to being quite expensive, payment protection can also provide quite limited coverage because of the high number of exemptions attached to policies. Many policies, for example, do not cover common ailments like back pain or stress.
Probably the most well known issue with payment protection is the fact it has been frequently mis-sold. In 2006 investigations by the Financial Service Authority and the Office of Fair Trading revealed serious issues with the way some lenders had sold the cover. Common failures include policies being added without the customer’s knowledge, customers being sold cover without a clear explanation of the costs and terms and customers being sold cover they were ineligible to use.
If you believe you have been mis-sold payment protection insurance, you can start your claim today by completing our quick claim form. We have already helped thousands of customers and settle many claims in just eight weeks.