Re-Claiming PPI Insurance

Widespread mis-selling of certain financial products and services has occurred in the past 20 years, and among the most common of those mis-sold by credit providers was Payment Protection Insurance (PPI). Victims can claim compensation and many have done so already, with PPI compensation claims reaching millions.

PPI has been called many other things: credit insurance, card protection insurance, credit protection insurance, card cover, loan repayment insurance, mortgage repayment insurance, and accident and sickness insurance.

All these terms essentially refer to a form of insurance that was offered as an add-on to a loan or credit card and was meant to cover repayments.

Specifically, PPI was presented as a way of ensuring that the repayment of the loan or credit would continue even if the borrower’s income is hampered due to job loss, an illness or disability, death or any other circumstance that prevents him or her from earning money to pay the debt owed.

PPI typically covered payments for a fixed and finite period, like 12 months, giving borrowers enough time to return to work and earn again. This way, they would have funds to repay the debt after the period lapses.

How PPI was mis-sold

Customers rarely sought out or requested for PPI. In many cases, it was part of the loan bundle. Some people did not even realize that PPI was sold to them.

Banks, credit providers and third-party brokers were all involved in the mis-selling of PPI, with telesales departments often handling related promotions.

Salespeople pushed for PPI, as this was commission-based. While little to zero profit can be made from the loan itself, PPI commissions were substantial and usually higher than the interest from the loan.

To encourage sales or discourage inquiries, certain companies followed scripts that did not fully explain what PPI was and the costs it entailed. Most scripts only mentioned that it was designed to protect the loan.

Some sales staff wrongly stated that PPI was among the loan requirements or that it would increase the likelihood that the loan would be approved. Afraid that they might lose the loan, many borrowers did not dig into or ask further questions about the policy.

It also appears that PPI was sold even to consumers who would never be qualified to claim such as those who have a pre-existing medical condition or are self-employed. It was included as well in the loans of borrowers who did not need PPI because they had similar coverage via other means.

How to approach a PPI compensation claim

If you were mis-sold PPI, you have two options for making a claim: take the DIY route or work with a lawyer or claims management firm.

To start off, gather all related documents, including the original loan agreement and corresponding statements and exchanges you had with your financial services provider.

Should you prefer to go about this on your own, you can proceed by getting in touch with your provider and submitting your conpensation request in the form of a letter.

Templates for the letter can be found online, but generally your letter must state: your credit and PPI reference numbers, the date of the policy, the kind of financial product or service it was bundled with, the reason you believe the PPI was mis-sold, and all your contails details as well as those of other people involved.

If you find it easier to have—and feel more comfortable and secure with—legal mediation or representation, seek out attorneys or firms who specialize in such claims.

An experienced attorney can guide you throughout the re-claiming process, just as a lawyer for estate planning is best suited to help you with inheritance issues if he or she has been practicing trust and estate law for years.

Many lawyers actually take on claim cases on a no-win-no-fee basis, which means you will only pay them if the claim is successful. Just be wary of those who charge upfront or charge too much.

When it comes to re-claiming PPI, what’s best for you depends on your specific case and circumstance. But if you can reach out to a legal professional or to someone who has experienced something similar, you will be better informed and can boost your chances of a successful claim. And remember, whether it’s a mortgage or a car or inheritance loan, it pays to be wary of any add-ons or policies that are offered to you. Don’t be afraid to seek clarification or ask questions.