Monday, February 20, 2012

Making a Mis-sold PPI Claim

Making a Mis-sold PPI Claim

Author: Jayden Baldwin

What is mis-sold PPI?

Payment Protection Insurance (PPI) is a form of insurance which is taken out to protect the repayment of debt in the case of the borrower being unable to make payments due to being made unemployed, or suffering, illness, incapacitation or death. It was mis-sold by many loan companies and high street banks for a decade, with products such as mortgages, loans, credit cards and overdrafts being covered with unethical, and now illegal, PPI policies.

Millions of people across the UK were mis-sold PPI and are entitled to make a claim. PPI is classed as mis-sold if: it was added to a loan product without the policyholder's knowledge; the policyholder was misled into believing that PPI was not optional; the policyholder was told that a loan or credit card was 'protected' without the full conditions or cost of the PPI being explained; or if the policyholder was led to believe that PPI would help with the approval of a loan. Some online lenders mis-sold PPI when they presented pre-ticked boxes for PPI, meaning that a borrower had to choose to opt out.

The mis-selling of PPI happened on a huge scale, with around a quarter of all PPI policies estimated as being mis-sold. This went on for a decade until April 2011. Last year the courts decided that selling PPI in these ways was unethical and told loan companies and banks to return around £4bn to 2.5 people in the UK. This money is only going to be returned to consumers who make a valid PPI refund claim.

Finding out if you have been Mis-sold PPI

Perhaps you now realise you have been mis-sold PPI, but what next? Look through your loan agreement and find out if you have been paying money for 'payment cover', 'ASU', 'payment protection', 'loan protection' or a similar term. It doesn't matter if your loan has since been paid back in full, if you were mis-sold PPI you are still entitled to a claim.

You may find that your PPI was paid as an additional charge with each loan repayment, or as a one-off payment at the start of your contract.

If you are unsure who your lender was obtain a credit report, which will list all of your financial products. It doesn't matter if you don't have a copy of your paperwork for your loan either; once you know who your lender is, you have a legal right to obtain a copy of your original agreement from them for £1. If your account is closed they are not obliged to provide this paperwork, but buying a full breakdown of your account will show you whether you were sold PPI.

The rules of mis-sold PPI claims state that you can usually only claim if your account was active within the last six years. So as long as you were still paying back a loan and its Mis-sold PPI six years ago, even if the loan was taken out ten years ago, you are due a claim.

How much can I claim?

A good mis-sold PPI claims management company will tell you whether you are entitled to make a mis-sold PPI claim, as well as guiding you through the claims process. You will not be able to reclaim your full loan, but the mis-sold PPI on that loan will likely still be a sizeable sum which you can reclaim.

The figure which you are entitled to claim depends on the size of the loan, the cost of repayments and other factors. Someone who took out a loan of £3,600 for three years could be entitled to over £500. For bigger loans and mortgages this sum could be in the thousands.
Payment Protection Insurance was mis-sold for a decade by leading high street banks and lenders, meaning that millions of people in the UK are entitled to claim back a total of £4 billion. This article explains how to find out if you can make a claim.


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