Mis-sold PPI.

by Ashton Field

The mis-selling of payment protection insurance has been called one of the worst financial mis-selling scandals of all time.

The premium for a loan is usually added to the loan meaning that the customer also paid interest on the insurance policy! Great news for the lenders. Bad news for the consumer.

Banks and other lenders made vast sums of money from the sale of PPI Policies and charge extortionate rates for the insurance which rarely pays out because of the restrictions and exclusions that were designed to stop people being able to claim.

There are many ways in which each PPI policy may qualify as a mis-sold policy. Typically lenders saying, untruthfully, that the PPI was needed to qualify for the loan, or not giving borrowers the chance to look elsewhere for PPI. Other failings on the part of the lender may have included selling a single premium policy that is paid up-front, or selling a policy to someone who is outside the eligible age range to benefit from the policy. Perhaps most extreme for mis-selling a policy designed to cover people for loss of earnings from employment, was to sell to people who were unemployed or self-employed, rendering the policy meaningless.

The premium on credit cards is usually added to the monthly repayment figure and this can run into thousands if you have had the card a long time and keep a high balance. The premium is usually a percentage of the balance. For example £1.00 per £100. You might think “Well, that’s only 1%”, but if you have a balance of £1000 you will be paying £10.00 per £1000. If you have a £10 000 balance that amounts to £100 on top of the normal payments.

Mis-selling scandal

Many people do not even realise they have PPI. Many more have no idea how much it has really cost them as it is often very unclear. Furthermore, lenders made it difficult to cancel when people do realise just how much the PPI has cost them.

It is up to the seller to make sure you have been fully informed of all of the restrictions. Another is if you have a pre-existing illness then you will not be able to claim.

There are over 10 reasons why PPI policy might have been mis-sold, so if you are like the rest of the UK population there is a very high chance you will be eligible for a reclaim.

The good news is that you can claim it all back with interest and the commission paid to the lender who sold it.

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