By: Julia Aidan
Submitted: 2009-08-11 05:17:37 | Word Count: 571
PPI or Payment Protection Insurance is an insurance cover that is taken to cover the repayments, if you are not able to provide for repayment; against loans, store cards, credit cards and other financial products like car finance and home loans. As a product PPI is not bad and is fashioned to meet your repayment schedule for a certain period, in case you are ill, disabled or unemployed.
The problem arises when the suave staff of banks and financial agents smooth talk and mis-sell thousands of policies annually. Secondly, the worst part is they sell policies to people who can never claim on it. They put stringent conditions so that people who hope to claim are not covered. Single premium PPI policy is also a case of mis-selling.
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To deter the PPI companies from mis-selling and taking gullible people for a ride, the Financial Services Authority (FSA) has stepped in and imposed fines on them for treating customers unfairly. The Competition Commission after thorough investigation has put a number of conditions on lenders, like banning sales within a week of selling a loan or credit card and totally banning single premium policies.
You can reclaim PPI, but it is dependent on when you took the cover. If you have purchased the policy after January 2005, you can approach FSA because PPI sales came under their jurisdiction since then. The Financial Ombudsman Service will look into complaints against purchases made prior to January 2005.
To reclaim PPI you have to establish that it has been mis-sold to you as per the following parameters.
- If the PPI has been sold to you by attaching it to your credit card or loan and premium for PPI is being debited to your account.
- If the insurance company did not ask you about your employment status - unemployed, self-employed or retired persons are not eligible for insurance cover.
- Whether the insurance people had cautioned you that PPI would be redundant, if you became unemployed due to your present physical problem.
- If you were sold a 'single premium' policy, you can get refund by canceling the PPI. If you cancelled or repaid the loan early, but could not cancel the PPI, than you can claim for a refund.
- If you were not explained the entire cost of PPI and was quoted the cost of loan with PPI attached.
- If you were informed that PPI was compulsory and insisted to take the insurance cover from them.
- Whether the upper age limit was explained to you or not before selling the Insurance cover.
- If you had alternative cover, but were not asked it.
- Whether you had been explained about the time limit of PPI cover in case of long-term loans. PPI cover is mostly for five years and the repayment of the loan may take longer.
- If you were sold PPI by a firm which already has FSA action against it.
To reclaim PPI, you have to first lodge a complaint with the firm that sold you the policy. If they do not resolve your case within the stipulated time, you can approach the Financial Ombudsman or FSA as the case may be. If the above authorities are convinced about the authenticity of your case, then you will be refunded all the premiums paid along with added interest of 8%.
