Payment protection insurance or PPI is that insurance which compensates your repayments as a result of any unprecedented event. You might lose your employment, fall sick or face an accident and this may hinder you from making repayments of your loan. Payment protection insurance comes in handy particularly in these circumstances. Usually, financial service providers like mortgage companies, vehicle loan companies and credit card providers sell you payment protection insurance.
Payment protection insurance can accumulate to 40% of the loan repayments you make. This is almost totally a gain for the lenders and banks. As a result, they often try to shove the customers to a loan contract to which payment protection insurance is a part. Since 2011, the banks have collectively decided to make compensation payments amounting to billions of pounds. This earmarked amount has been named as PPI refund.
How do you know if you have been mis-sold payment protection insurance?
When the payment protection insurance cost is mistakenly added to the cost of your loan without your permission, then you have been mis-sold payment protection insurance. To be more precise, if any of the following conditions was there, it is a surefire sign that you have been mis-sold payment protection insurance:
- Irrespective of the fact that you didn’t request for it, it has been included in the policy
- You were informed that payment protection insurance was mandatory or you have an improved probability of acknowledgement of your loan application
- You did not have the idea that payment protection cover was discretionary
- You were jobless, self-employed, or retired from work at the time the cover was withdrawn
- They did not inform you about selling PPI to you
- They did not provide the complete details of the policy to you
- They did not inform you that you can purchase PPI from any other place
- The whole cost of PPI was not clarified to you
- If you had particular disease which makes you exempt from buying PPI but still it was sold to you
When you can make a Payment Protection Insurance refund claim
- Majority of policies have an upper age cap which is typically 65 or 70. At the time you bought the policy, if your age was more than that, you are allowed to make a claim for refund.
- If you bought PPI from one of the companies against which FSA took some stringent steps, there’s high probability that you will get your refund.
- You can make a claim if you already had substitute cover in place like employer illness and income protection.
- If you have purchased PPI for compensating a loan with an extensive term, it is probable that the PPI will be exhausted prior to the loan repayment is made. Majority of policies have a term of five years. Therefore, if the tenure of your loan is more extensive then the seller should have made it clear in the beginning. You can make a claim if any such thing didn’t happen.
It is advisable that you take the help of a specialized payment protection insurance claim company. They have all the necessary experience regarding how to deal with banks and can help you get the maximum benefit or claim. If it is decided that PPI was mis-sold to you, you will receive the whole premium amount along with interest. However, beware of scams.