‘What is Payment Protection Insurance?’
PPI is a form of insurance which is normally sold on loans, credit cards and mortgages. It was initially designed to cover monthly payments on accounts if you were unable to work due to accident, sickness or redundancy.
PPI has been around for years now. In principle it is a useful, important product to have because it protects you in case you’re unable to work and therefore unable to pay back your loans, credit cards or mortgage.
‘What is Wrong with PPI?’
PPI was costly and unnecessary in some cases; some people were even sold a policy without their knowledge. The Citizens Advice Bureau’s investigation into the market found that customers were being overcharged by over £1 billion per year for PPI. PPI contributed to around 13-56% of the cost of a loan and a recently surfaced 2001 survey found that as much 85% of people who tried to claim back on their policy were unsuccessful.
‘Am I Eligible For a Refund?’
If you were mis-sold PPI, then there is a list of scenarios that could result in you receiving a refund.
- Were you unemployed or retired when you took out the loan?
- Were you told that you’d need a PPI policy in order to take out the line of credit in the first place?
- Were you self-employed at the time you signed the agreement? Most policies exclude self-employed, so it would be pointless to make a claim.
- Did you have any pre-existing medical conditions? Most policies don’t allow you to claim if your illness predated the policy.
- Were you aware that you were paying for PPI cover? If you weren’t, you won’t have been told about the terms and conditions.
- Were you told that you had to have a PPI policy in order to get a line of credit?
- Were you asked whether you had any other form of income protection insurance, which you could have utilised instead?