Miss Sold PPI Contract

Miss Sold PPI Contract
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Payment Protection Insurance – Mis-selling at a glance

It’s not the loan that is the problem. It’s the insurance sold alongside the loan to protect you against not being able to make repayments for a number of reasons such as an accident or a sickness or being made redundant from work. It’s called PPI.

So just what is Payment Protection Insurance (PPI)?

Payment protection insurance (PPI) policies are designed to help you repay your debts (such as mortgages, loans and credit cards) if you have to stop working because you have an accident or become ill or you become unemployed.
How these insurance policies actually work and the range of benefits they offer can vary significantly from policy to policy. Payment protection policies are often sold as part of the deal when consumers take out a loan, mortgage or credit card, but it is also possible to buy a “stand-alone” payment protection policy from an insurance company that has no direct involvement with the loan, mortgage or credit card covered by the policy. Many people have it and are unaware.

Why is there a problem?

In June 2008 – following on from a formal complaint about PPI made by Citizens Advice to the Office of Fair Trading, The Competition Commission made a large number of provisional findings. These included finding that:

• The vast majority of the UK’s 14 million PPI policies are sold at the same time as a consumer takes out a loan or other type of credit.
• Many consumers are unaware that they can buy PPI from other providers and rarely shop around to compare prices and policies.
• The actual cost of PPI in relation to the cost of the loan or credit is not easy for consumers to work out.
• Because there is insufficient competition when selling PPI, it appears that consumers are overcharged for PPI by over £1.4 billion.

In addition, the FSA’s recent work on PPI has shown that the FSA’s investigation of face-to-face sales of single-premium PPI alongside personal loans showed that:

• Very few consumers were told that the cost of the PPI would be added to the loan as a single premium – and that interest would be charged on this amount.
• Half the consumers said they were not told about the key limitations and exclusions of the PPI (which is fundamental to establishing the consumers’ needs and eligibility).
• And many consumers were not told the monthly and total cost of their PPI.

In October 2008 the FSA fined a bank £7 million because of the way it had sold PPI in connection with personal loans arranged by phone. The bank’s failures included:

• not making it clear that consumers did not have to buy PPI;
• not disclosing adequately the limitations of the cover provided;
• providing information that was often inaccurate, unfair or misleading;
• recommending PPI without first checking consumers’ circumstances; and
• Failing to train and monitor sales staff.

What does this mean for you?

If PPI was mis-sold to you then you can make a claim to get back the proportion of your monthly loan or credit-card payments that represented the PPI payments, plus interest. There are many reasons why PPI may have been mis-sold to you in the first place. Please complete the questionnaire and we will be able to advice you if you have a complaint.

PPI Mis-selling