Have You Taken Out A Loan In The Last 10 Years?
Payment protection insurance (PPI) is a form of insurance offered by banks and many other financial institutions. It is designed to cover monthly payments if you are unable to work for any reason. Many people are relieved that they purchased payment protection insurance after losing their job or becoming ill. However, many people purchased PPI policies that they didn’t need or were misled about what it would cover. These people may be eligible for a PPI refund.
People purchase payment protection insurance to cover themselves if they face any problems that would make it difficult to keep up the monthly repayments on their finance agreements. PPI generally covers people that become sick or lose their jobs. They can use it to protect their credit agreement, avoid repossessions or foreclosures and avoid having accumulating interest.
Most consumers purchase payment protection insurance directly through their financial institution. However, they can also purchase it through an insurance company, which is often a lot cheaper.
The consumer’s repayments will be covered while they are sick or unemployed. Every PPI policy is different, however, so customers will need to review the terms carefully to know if they will receive coverage and if it will be beneficial for them.
You are not legally required to purchase payment protection insurance (PPI). Many people don’t need it, but many can benefit from it. It can be a good way to hedge risk if there is a possibility of being unable to make repayments in the future. However, it may not be worthwhile if your job offers a generous severance package, provides sufficient sick leave or you have enough savings to pay off your debts for a while.
Payment protection insurance is beneficial for some people in certain situations, but there are also drawbacks you need to be aware of. Here are some of the situations where you will not receive coverage under most PPI policies:
These are general guidelines, so you should check your policy for precise details as they apply to you. Every insurance company underwrites policies a little differently, so it is a good idea to verify the terms before taking one out.
It is also important to realise that it takes time for your coverage to take effect. You will need to have some savings to hold you over while waiting for the policy to kick in. Once again, you should check the terms of your policy to learn more.
PPI is a valid type of insurance for many people, but many financial institutions sold it simply to boost their profits. Here are some ways that banks mis-sold PPI to customers that didn’t need it:
The Financial Services Authority estimates that about 16 million people have filed PPI claims since 2005. The nation’s banks have been forced to pay compensation to millions of customers. They are setting aside more money for future claims.
Customers that were mis-sold payment protection insurance are entitled to refunds. You will receive compensation for premiums that you paid over the years and interest on those premiums. The interest can be significantly greater than the premiums.
The FOS requires banks to pay 8% interest on all PPI payments made since 1993, and 15% interest on PPI premiums paid prior to that. The interest will not be compounded.
The Financial Ombudsman will take longer to issue a decision, because the review process tends to be more involved. There are two different ways that the FOS will handle the process:
You should file a claim directly through your financial institution in the first instance and if you receive an unsatisfactory conclusion, you can then take your case to the Financial Ombudsman Service (FOS).
Many customers have received compensation for mis-sold PPI policies, while others are still debating whether to file for a refund. Here are some facts that may help convince you:
Keep in mind that every situation is different. You will want to review your information and find out if you are eligible for a PPI refund. You should check with your bank for more information, because the Consumer Credit Act requires financial institutions to provide information on payment protection insurance claims that they have filed.
It is always a good idea to do your due diligence before filing a claim. Before you begin, you will need to show paperwork regarding the terms of the loan and the premiums that you paid. Make sure that you have this information on hand to make the process go as efficiently as possible.