In the UK there is currently a big media furor surrounding payment protection insurance.
PPI is essentially insurance that is sold on credit, so a loan or a mortgage for example, and it is there in case you cannot meet your monthly payments for reasons such as sickness or if you are made unemployed during the course of the loan. In order to receive this insurance, you pay extra each month on your monthly payment. Of course this money goes to the bank which is issuing the credit.
Unfortunately, banks were found to have been mis-selling this PPI cover to unsuspecting customers when they didn’t need or in some cases didn’t even qualify for it. This meant they were paying a monthly fee either under false pretences or pointlessly because they could never benefit from it anyway. The banks were making millions on this each year.
Some of the ways payment protection insurance was mis-sold are detailed below:
- Saying you HAD to take it - Some bank employees were telling customers that they had to take PPI – that it was not optional. Customers would rarely argue with this as they just assumed what they were being told was true
- Saying you would not get credit without it - When somebody applies for a loan or mortgage they obviously need the money for some reason, and really want to get accepted. This was played upon as they were told that they stood a much better chance of acceptance if they took out this insurance.
- Not being in full-time employment - Those who were not in full-time employment at the time the credit was given were not eligible for PPI, but were sold it anyway.
- Having a medical condition - There are some medical conditions, such as a heart condition for example, that means you are not eligible for the insurance as you are deemed high risk. This didn’t stop people with these conditions being sold it though.
- You weren’t even told - Some people were paying for PPI without even knowing it. This is because the bank added it onto their monthly repayment and didn’t tell them, so people never had any idea!
Precision Claims helps people claim back mis-sold payment protection insurance that they paid for under false pretences.