PPI, which stands for ‘Payment Protection Insurance’, is basically designed to cover your loan, hire purchase agreement or credit card repayments for a year in case you are unable to repay your loans on time because of accident, sickness or unemployment. But consumers have often complained that they have been forced to buy a policy from the same provider as the loan in order to qualify for the insurance product, which is not true.
Mis-selling has been rampant and widespread primarily because the sales people disguised as insurance advisers were offered huge incentives and commissions to drive sales and sell PPI whenever possible. This led them to misguide their clients and customers, who erroneously believed their advisers. Sales people did not make clear that the policy was entirely optional, and even insisted that the policy was required to qualify for the product or help with the application. They sometimes deliberately implied that the product would become more expensive if the customers did not opt for the PPI.
These policies are usually very expensive as compared to the level of cover they provide and many policies have important exemptions, making it difficult for policyholders to make a legitimate claim. PPI mis-selling has been around for a long time, and only very recently have new regulations enabled customers to claim compensation for their mis-sold PPI. Even though the financial regulator started fining PPI companies in 2006, no drastic change was noticed until 2011. Though there is no set deadline for a person for reclamation, but it is usually better if it is done within six years of the account being closed.
Sometimes people are mis-sold PPI without even knowing it. In this case, they may first need to find whether they have been mis-sold a policy by either checking their credit card statements or by directly contacting the lender. And if the financial institution, or the Financial Ombudsman Service, agrees that you were mis-sold the insurance, you can claim and get back all the premiums you have paid, along with the interest. Even if you were not mis-sold the policy initially, but not treated in a fair manner when you wanted to cancel your premium or cover, you can still challenge them.
However, if you were unemployed at the time you took the insurance, it might be impossible for you to make a legitimate insurance claim. Also, if you had a medical problem at the time you took the insurance, it might be very difficult to file a claim; you would need to prove that you were not warned before taking the insurance policy. The most valid cases of mis-selling are those where the customers who were sold the insurance had no chance of claiming it.
The amount of time taken to realise the compensation depends upon the complexity of the claim and the lender’s attitude towards the claim. But in most cases, it gets resolved quickly, and you may receive your claim within a couple of weeks! There are many firms that can help you to realise your claim in an efficient and timely manner. An increase in successful PPI claims has even led the leading banks in the UK to increase their provisions for PPI.
This post has been written in association with ABC Incorporation, one of the leading Claims Management companies in the UK. Their vast experience in this domain ensures that the claim process becomes easy and the clients receive the maximum compensation possible. They work on the principle of “no win, no fee” and even offer a free no obligation consultation.
