What is Payment Protection Insurance (PPI)? | PPI Reclaims Company

Have you ever thought what might happen if you became sick, had an accident or got made redundant and couldn’t carry on paying a loan or credit card? Most people never consciously plan for a time when they might be unable to pay a lender back the money they owe, but with the way unscrupulous lenders have been behaving over the last few years thousands of people are unaware they have had Payment Protection Insurance forced upon them for such an eventuality. And most of time, they’re paying for something that they are not eligible to claim on.

Payment Protection Insurance is designed to ensure you can continue paying a lender what you owe each month if you lose your income due to accident, illness or redundancy. In that respect, it is a very useful piece of insurance. Crucially however, it is the way Payment Protection Insurance has been sold – or rather mis sold – that is the problem and has triggered a wave of PPI reclaims.

The Payment Protection Insurance Industry is in trouble

A few years ago lenders began to impose targets on their staff to sell these Payment Protection Insurance polices, often imposing pay cuts on individuals if they failed to reach their targets. The result was desperate staff selling Payment Protection Insurance policies any way they could, even if it meant they had to misrepresent them to customers. 

Common tactics of mis selling Payment Protection Insurance include not telling you it is included in your loan repayment so you don’t know you have it, the lender telling you it’s compulsory to have it, you not being eligible to make a claim when you took out the policy (such as being unemployed, retired or with a pre-existing medical condition) or not checking to see if you were already covered by an existing insurance policy.

Lenders have a responsibility to ensure you understand what Payment Protection Insurance when you are purchasing it, and that is it appropriate for you and your circumstances. You should be told about all exclusions to the policy and if you it is obvious you will not benefit, they should recommend you not go ahead with the Payment Protection Insurance policy.

(To find out more and to see if you have been mis sold Payment Protection Insurance, read our two part article; “The Different Ways You Could Have Been Mis sold PPI”.

What should you do if you think you have been mis sold Payment Protection Insurance?

The first step is to start a PPI reclaim. Now a few years ago, it would have been relatively easy for you to set your PPI reclaim in motion and get your refund. Unfortunately, two things have happened that is making this process incredibly difficult to do without outside help.

First, it is clear that lenders have begun to reject PPI reclaims immediately that they receive them, and now refunds for mis sold Payment Protection Insurance are getting harder to obtain. In fact, the Financial Ombudsman has complained to the Financial Regulators that it lenders appear to be deliberately trying to obstruct the process, despite 89% of PPI reclaim cases dealt with by the Ombudsman being decided in the consumer’s favour.

Two, there has been an increase in the number of people obtaining loans and credit cards on the Internet, where the full Terms and Conditions of obtaining credit from the lender are usually provided. It is very difficult to do a PPI reclaim under these circumstances because you tick a box to confirm you have read and understood the lender’s Terms and Conditions.

The only exception to this which could form the basis of you PPI reclaim is that you purchased your policy from the lender and the boxes were pre-ticked for you. Although not illegal, it is a sharp practice that all lenders agreed to stop doing in 2007. Many people did not realise certain boxes had been ticked for them when they submitted their applications and were unaware they should have unticked the boxes to opt out. However, unsurprisingly this was the whole point of the lender’s have pre-ticked boxes – to fool the unsuspecting consumer. If this has happened to you, you will almost certainly need the help of a Payment Protection Insurance advisor and expert in PPI reclaims to drive your case through.

There are many ways you could have been mis sold Payment Protection Insurance and the climate for successfully launching a PPI reclaim and obtaining a refund is harder than ever before. We are a leading PPI Reclaims Company and can get your money back for you. Visit our PPI FAQs for more Frequently asked questions regarding PPI. To talk to a Payment Protection Insurance advisor about whether you have a case for a PPI reclaim and how to proceed with it, call one of our experienced PPI advisors on 0800 043 2027 or request a free call back here.