The loan insurance scandal and how it started
by Russell Shackleford, 19th September 2011
PPI policies have been widely mis-sold by banks and other
financial institutions within recent years, and it is due to this
undeniable fact and the resultant scandal that many individuals are
now making PPI reclaim attempts in order to receive compensation
for the grand rip-off perpetrated by greedy bankers and
unscrupulous insurance brokers.
PPI, or Payment Protection Insurance, is a form of loan
insurance which is intended as a means of protecting your ability
to continue repaying a loan. To the untrained ear, this sounds like
an excellent policy to take out - if you should suffer an
unexpected loss of income, the theory goes, you will be able to
claim on the insurance and thereby receive a payout which will help
you to maintain the repayment of your loan.
However, while this idea may be theoretically sound, the way in
which the banks chose to sell PPI meant that vast numbers of
policies were actually sold to those who did not feel that they
wanted such PPI, with many people finding that they had simply had
a policy added onto the total they had to pay without being
informed by their bank, or having the policy slipped under the
radar with financial doublespeak or confusing jargon which
disguised the fact they were paying for an optional extra by taking
out a "fully-protected" loan.
Others were keen to take out PPI - but were not told that they
may already have loan coverage with another policy, or that due to
their circumstances they would never be eligible to claim. These
sorts of things should be checked by the bank beforehand - but in
their relentless pursuit of profit, many did not bother.
Fortunately, the FSA has come down on the banks hard, meaning
that they can no longer mis-sell PPI and that victims of mis-sold
PPI can claim compensation.
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010