Credit Card PPI
Many consumers who have taken out a credit card within the last 6 years may have been sold Payment Protection Insurance without even being aware of this. PPI is a product which is designed to cover the policyholder’s monthly debt servicing payments in the event that he cannot afford these because he has lost his job or become too ill to work. However, exorbitant PPI premiums and policy terms which exclude all but a handful of people from claiming the benefit of the insurance mean that the product is often bad value for consumers. However, financial services firms have still been able to make billions from PPI by breaking tough Financial Services Authority regulations on sales standards, resulting in an epidemic of “mis-selling”.
Until January 2010 it was legal for credit card providers, loan providers and other credit companies to sell PPI alongside their credit products and this created a fertile ground for PPI mis-selling to spread. Many PPI salesmen found it easy to add PPI to credit card applications without the consumer being aware of this, usually by resorting to an innocent looking “tick here if you want to protect your card box”. What consumers were not aware of is that by ticking this box they were agreeing to purchase a PPI policy.
This is just one example of how mis-selling can occur. Millions of credit card holders could have been mis-sold Payment Protection Insurance, and in each case the insurance contract is invalid, entitling the consumer to a full refund of any policy premiums which have been paid. This means that if you have ever had a credit card, you may be entitled to compensation worth thousands of pounds and we can help you claim.
Loan PPI
Over the past several years Payment Protection Insurance has attracted a substantial amount of negative publicity. PPI is a product which allows consumers to pay a premium in return for insurance cover that will pay their monthly debt servicing costs if they are unable to work due to accident or illness or if they are made redundant. However, many PPI policies are of limited value to consumers and millions of people have successfully claimed that their policy was mis-sold to them in breach of Financial Services Authority guidelines, entitling them to a refund of all PPI premiums that they have paid.
One type of loan PPI which is particularly prone to mis-selling is so-called “single premium” or “up-front” PPI. This is a type of policy which is intended to provide PPI cover for a loan or mortgage over the lifetime of the loan or some other fixed period of time. Under a single premium PPI policy the consumer is not required to pay monthly premiums in return for cover, instead the PPI provider calculates a notional monthly premium and multiplies this by the lifespan of the loan in order to work out a single lump sum payment. Because this payment often amounts to tens of thousands of pounds, it is added to the loan balance and accrues interest. This means that over the lifetime of the loan the consumer may end up paying several times more for PPI cover than he would if he had opted for a monthly premium policy. In 2009 the Financial Services Authority decided that single premium PPI cover was completely unsuitable for virtually everyone it was sold to and further sales were banned. This means that if you have ever had a PPI policy of this type attached to your loan, you will have an extremely strong case for mis-selling.
Because until January 2010 finance companies were allowed to sell PPI policies alongside credit products such as loans, many people have purchased PPI policies. If you are one of them, you may have a claim for compensation and we can help you with your case today.
Mortgage PPI
Did you know that people who have bought a house or remortgaged their property within the last 6 years may be entitled to compensation worth thousands, or in some cases tens of thousands of pounds? This is because many people were mis-sold a PPI policy alongside their mortgage.
PPI, or Payment Protection Insurance, is a financial product which allows the consumer to buy peace of mind that their mortgage (or other credit) repayments will be met if they are unable to service these debts themselves due to losing their job or being unable to work due to accident or illness. Whilst this sounds good, the insurance premiums which are charged are often disproportionately high in relation to the payments which are insured and the policy terms usually contain extensive restrictions which would prevent policy holders from claiming the benefit of the insurance in the majority of situations. Although this means that PPI is often a poor choice for consumers, the number of people who have a PPI policy is surprisingly high, due largely to the way in which many PPI providers have mis-sold policies by breaching Financial Services Authority rules on fair selling.
PPI providers are only permitted to recommend products which are genuinely suitable and adequate for the consumer’s needs, but because of the restrictions which are built into most PPI policies by default very few consumers would genuinely benefit from PPI cover. Salespeople got around this difficulty by deliberately overstating the benefits of PPI polices whilst concealing the restrictions and exclusions in order to induce customers to buy.
Before January 2010 it was legal for mortgage providers and other credit companies to sell PPI alongside a credit product, providing an ideal opportunity for the salesperson to use pressure tactics or undue influence in persuading the consumer to agree to PPI cover – in some cases, salespeople even added PPI cover to mortgages without first asking the consumer. Although the marketing of PPI alongside credit products was outlawed in January 2010 for consumer protection reasons this was too late – millions of consumers had already been saddled with expensive PPI products which were often worthless.