The PPI Scandal: What you need to know if you have taken out a loan or credit card

Payment Protection Insurance (PPI) is an insurance policy sold with any type of credit agreement. It is designed to cover the monthly repayments in the event that the consumer is unable to work through sickness, accident or unemployment. PPI has been packaged and sold along with loans for the past 15 years until the sale of these was banned in 2009 by the FSA. PPI is not fundamentally a bad product; the problem is the manner in which it has been sold and the unfair structure of single premium PPI.

According to the Citizens Advice Bureau 80% of Payment Protection Insurance policies were mis-sold on credit cards and loans to millions of UK citizens. Lenders have been accused of pressuring people into purchasing PPI by refusing to grant a loan or credit card without it. This has forced buyers to purchase insurance which they might not necessarily need or be able to afford. Allegations have also been made that providers sold policies that were over-priced and packaged with exclusions for self- employed and part-time workers.
Since the ban took place, anyone who has purchased this insurance is legally entitled to recover it with interest and compensation.
It is well known that consumers are not even aware that they have purchased PPI with their loan or credit card. Hence it is extremely important for people to understand their rights and realise that they are victims of PPI mis-selling.

Another concern is for those consumers who do not feel they have the time or understanding to handle the claim process themselves. Some might be intimidated at the thought of standing up to the large institutions that sold them the insurance in the first place.

If consumers are unsure how much they are eligible to claim they can use an online PPI claim calculator. It is also advisable to contact a professional PPI Claims company to process claims against providers to recover the amount paid by the consumer for their PPI. Many of these companies operate on a no win no fee basis taking a percentage of the proceeds from the claim and boast a very high success rates of 70%-90%. According to the Financial Ombudsman Service, 9 out of ten claims are ruled in favour of the consumer. Currently, it is estimated that there are 33 million people who have been mis sold Payment Protection Insurance who are entitled to gain compensation.

PPI Claimline reclaims PPI which has been mis-sold by providers to consumers. PPI Claimline has been trading since June 2009 and is regulated by the Ministry of Justice.