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, fall ill, 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 occurs when a payment protection insurance policy 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.
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 a payment protection insurance policy 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 we can help. 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 right to get your claim started.