DE-PRESSURISING PAYMENT PROTECTION

QUE STION: How many people do you know who have at some point contacted a financial institution so they can apply for a loan or a mortgage or another type of finance?

ANSWER: Probably almost all of the people you know.

But how many of them also WANTED to apply for PPI, or payment protection insurance? The answer to this question is almost certainly next to none of them.

Yet, how many of them will have ended up with PPI? Yep, you’ve guessed it, most of them.

Why Do People End Up With PPI Cover?

Quite simply, because the banks and other financial institutions want them to, because it is profitable. They structure the sales process (or in some cases, used to) so that the “Financial Adviser” is paid more if they have sold the PPI to the customer.

Variations on this may include the sales person, sorry, erm, “Financial Adviser”, having to hit a target of sales before receiving any commissions, which could form a substantial part of his or her income. Weekly targets put the employee under constant pressure to keep selling what are, or were, effectively unwanted financial products to customers, or at the very least, mainly mis-sold financial products. This type of practice has been known to go so far that it was not uncommon even for bank counter staff to ask customers if they were interested in opening more accounts, or to apply for credit cards, or to take out PPI and a host of other very profitable (for the lender) financial products. Many employees who have had to do this found it somewhat demotivating, especially when they did not in the first instance apply for a job that involved selling. Incidentally, could this have had an effect on the current banking crisis where many of the people who work in and also run Britain’s banks do not now have a banking qualification – would you want to train as a banker just so you could sell?

What Benefit Do People Get Who Have Ended Up With PPI?

Another good question. How many people who take out PPI actually go through the process of making a claim i.e. if they ever experience loss of earnings and are then unable to meet the loan repayments? Probably about the same number as those who wanted to take PPI out in the first place, i.e. not very many.

How many of the people who do make a claim, actually manage to make a SUCCESSFUL CLAIM? Well, let’s just say that the numbers do not reflect favourably on the financial services industry.

So How Do People End Up With PPI Cover?

There are many techniques that were used to encourage borrowers to unwittingly inflict even greater financial hardship upon themselves. These were in many cases unfair and form the basis for claiming back your PPI payments, and possibly also the commission paid to the salesperson, from the lender. In short they were mis-sold.

How Do I Know If I Can Claim Back PPI Payments?

You can download a FREE checklist from ppi-ppi.co.uk to see if you are eligible to reclaim your premiums, which the majority of PPI policyholders are. Some of the more common failings include: you were not employed by another person or organization at the time, being pressured into the PPI, having to take out the PPI at the same time as the loan; being told the PPI increased your chances of getting the loan, not being given a choice to look elsewhere for PPI cover; being told it was compulsory; paying upfront; increasing your loan and PPI was raised too.

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