Payment Protection Insurance, which is intended to cover a consumers debt repayments in times they become unable to due to sickness, accident, or unemployment, has been discovered to have been mis-sold to potentially millions of financial borrowers several years ago. Due to the discovery of such fiasco, a lot of people have started lining up banks sending in requests to have their policies and their accounts reviewed for a potential compensation.
PPI claims have flooded offices of financial institutions nationwide. In fact, a great majority of these claims have already succeeded.
But how has PPI been mis-sold and how can people make PPI claims? Let’s all have a look at the basics.
First of all PPI has been intended as an add-on policy for both the consumer and the bank’s protection. It prevents the debt from piling up on the consumer’s end while it also protects the bank from potential loss due to unpaid credit. But it just happened that profit-oriented institutions and their staff found ways to cheat people by applying sales tactics that breached regulations.
Credit-takers were made to believe that PPI was a compulsory product and applications are never going to be approved without it. There are instances where people were just forced into buying the product without being told the very important information about it. Some were also ineligible – under 18 or over 65, with pre-existing medical condition, and not employed full time, but were still signed up to the policy.
PPI’s cost can also skyrocket and most people do not know about it. In cases of policies applied to credit cards, the premium amount depends on how much balance is due. In loans and other lump sum agreements, the policy can cost thousands of pounds. These details were not often discussed to consumers.
If you want to find out how much you have paid to PPI and for how long, you can start by looking at your statements and your loan agreement forms. These documents contain reference to the policy. Also, an insurance policy certificate should follow through following the sale; whether you were aware you signed up to it or it was automatically added to your account. All pieces of information should be there.
When you’ve got all these details together and you want to make a PPI claim just as others did, write to your bank about it. Tell them that you wish to get your payments back on the policy premium and whatever amount of interest it rolled from when you had it.
Attach the relevant documents you collected to your letter and let the bank facilitate a review for 6 to 8 weeks. During this time your best option will be to wait for the notification. The decision that your bank will make about your claim depends on the validity of the case and the evidence presented. They will also have to refer to other pertinent information about your account in their database.
If they fail to communicate with you, you have every reason to follow up or lodge a complaint against them at the Financial Ombudsman Service. The FOS specialises in resolving financial disputes between banks and consumers, especially PPI claims. You can lodge the same complaint if you feel that the bank’s decision was done in bad discretion.
And while there has been no set deadline yet as to how far back PPI claims can be made, you’d best do it now so you can get your money back in weeks. There are cases though that claims were made for policies dating to ten years back. It isn’t conclusive but the earlier you act to resolve a mis-sold PPI policy, the bigger chances you get at claiming your money back.