The possibility exists that substantial refunds are available to anyone who has obtained a loan, credit card or buying card from a store for the last six years. This is as a result of the great number of Payment Protection Insurance (PPI) contracts that were issued to accompany this type of product. Many people availing themselves of these services may well have been mis-sold PPI.
The idea behind payment protection policies is basically sound. They are meant to offer some degree of protection to a borrower if they become ill, meet with an accident or suddenly find themselves unemployed. The problem concerns the way in which the policies are sold. Many banks and finance companies instruct their employees they have to sell the policies or be penalised if they don’t.
The consumer may be informed that taking out a policy is compulsory in order to secure a loan or other service. This isn’t true, which is mis-selling on its own. There is a reasonably good chance that anyone who is unemployed, self employed or even retired may already have the necessary cover in an existing policy and will not need another one. There is the possibility a person has been sold a policy without realizing it although, due to heavy regulation in recent years, this would appear unlikely. Many older loans however, may have been sold under these circumstances.
Sometimes clients call their banks requesting a quote on the monthly repayments required for a specific loan. They will be quoted a figure by the banks consultant who will inform them at the same time that their loan will be fully protected which is jargon for an expensive policy. Many clients won’t be able to calculate the repayment amounts in their head but if the figure sounds reasonable, it will be accepted and another mis-sold PPI policy will be in force.
Loans themselves are not the real profit generators. A huge profit is made from the combined loan and cover policy. After a 15 month investigation, in June 2008, the Competition Commission revealed how much money was being made from policies by examining what the public was paying in for their cover, against what was being paid out. The cost of insurance is normally a lot higher than interest charges, but insurance companies do not reap these benefits, the companies who sell the products do.
Anyone who was mis-sold PPI, was probably not supplied the full details of the policy they bought. Some of the misleading tactics used by lending companies are to tell their customers that a policy linked to a loan is compulsory, failing to mention the policy and failing to enquire whether the client may already have the cover from another policy. These companies have a duty to keep their customers informed about all details of their policies and to check with their clients that they really need the product.
When a client suspects that they have been sold a product without having full details, they are entitled to claim a refund of the premiums paid. An initial claim should be made. This will probably be rejected amidst some legal jargon. Most people give up at this stage. If the client persists and mentions the Financial Ombudsman Service, the chances of a refund are much better.
Many claims examined by the Ombudsman are decided in the consumers favor. If the consumers claim is successful, the cancellation of his policy is fairly certain, if it is active. Clients should bear this in mind. The information in this article is a superficial look at the problems facing consumers that have been mis-sold PPI.
Looking to get your cash back from mis-sold ppi? Then visit www.PPIRefundsUK.co.uk to start your PPI reclaim today.
