PPI Frequently Asked Questions
What is PPI?
PPI is Payment Protection Insurance - a type of insurance policy
which is often sold alongside various types of loan. The idea
behind PPI is that you pay an insurance premium in addition to the
repayments on your loan, which is then intended to protect you from
any unexpected loss of income. If you lose your job, suffer a
serious injury or end up in any other situation which means you are
not earning money any more, the insurance pays out and ensures you
have enough cash to continue with the repayments - in theory, at
least.
Why is PPI bad?
Payment Protection Insurance is not, in itself, a bad thing -
but it is only suitable for a minority of borrowers. As with most
insurance policies, PPI schemes are riddled with exceptions, and
many people are not eligible to take out PPI in the first place.
There would not be a problem with this in general, if not for PPI
mis-selling.
What is PPI mis-selling?
PPI mis-selling is when a Payment Protection Insurance is sold
to someone when it should not have been. There are a number of
reasons why an individual should not be sold PPI.
First of all, there are cases where someone is encouraged by the
lender to take out a policy which is not actually suited to them.
This may include people not in full-time work, who have long-term
illnesses and many other situations - take a look at our Grounds
for PPI Compensation page for more information on this. The outcome
is that the borrower ends up paying for a PPI policy which is not
applicable to their situation and can never pay out.
Other people have been told that they must take out a PPI
policy, or that it will give them a greater chance of being
approved for the loan. Some consumers have even had PPI added onto
their loan without being told about it. All of the prior situations
are clear cases of PPI mis-selling.
Which products was PPI sold with?
PPI has been sold alongside all types of loans, including
mortgages and credit cards. If you have any kind of loan from a
bank, you may have been a victim of PPI mis-selling - possibly
without even realising it.
Who has been mis-selling PPI?
Because most of the profit on loans is made from selling PPI
policies, they are available from pretty much every bank or
building society around. Forcing PPI policies onto people who
didn't want them, didn't need them or couldn't use them was not an
isolated occurrence - it was widespread amongst financial
institutions. In fact, if you took out a loan and were not sold a
PPI policy, you are one of the lucky ones.
How can I tell if I have PPI?
As mentioned above, some borrowers were sold PPI policies
without even being told about it - so you may have Payment
Protection Insurance you weren't aware of. If you have a loan, it
is worth checking the original loan documents and seeing if it is
mentioned. It may also be worthwhile checking your loan statements
to see if there are any unexplained charges in addition to the
repayments, or looking at your banking history to check for any
direct debits you were not aware of. Take note that PPI is known by
many names, including loan insurance, debt protection and any
number of other variants. Just because you don't see "PPI" listed
on any document doesn't mean you haven't been paying for it.
If you are still not certain whether or not you have a PPI
policy, get in touch with us and we will be glad to assist you.
How much compensation am I likely to get?
The amount of compensation you will receive is dependent on the
cost of your loan and the premiums you've paid for your policy.
Have a look at our PPI Calculator for an estimate of how much you
could reclaim.
How long will it take to make a claim?
In the wake of the banks' defeat in the PPI mis-selling court
case, many people are sending in PPI complaints to their lending
institution, meaning that your claim could take a while to go
through. Some experts have suggested that it could take as long as
five years for the PPI backlog to be cleared.
If you want to be sure to get your refund as soon as possible,
then making a claim through us is the best way to go about it. We
know all the strategies and tricks for ensuring that your reclaim
goes through without a hitch, meaning you'll receive the money
faster and without all the hassle. Fill out the form on the left to
get your claim started.
"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