Mis-Sold PPI: The story so far

Payment Protection Insurance or PPI is a form of insurance policy created to allow the borrower to keep paying their mortgages and loans in case of unemployment, illness or other conditions that hinder the payment. PPI is usually purchased as an add on or a standalone policy and under normal conditions this policy is sound, however the application has been riddled with holes from issues with loans with mandatory PPI policies, case by case applications of the policy and disputes with refunds of unclaimed PPI. In most of the complaints brought to the ombudsman, the complainants didnt even know that they were sold the policy.

Investigations into these cases have found that the brokers who approved the loans were motivated to sell PPI because of the commissions they would get. They then began selling the insurance to their clients without the latters full understanding or need for the policy. In most cases of mis-selling, the policy became of no use to the buyers and has only given them headache, prompting a well merited future appointment with the financial ombudsman. Because of the unceasing complaints that have turned up, the City watchdogs (FSA) examined previous PPI sales, which led to a very interesting court battle. Among the many items that were found were:

Brokers describing PPI as a necessary add on to approve a loan
Brokers not properly explaining the policy completely
Payment Protection being sold to people who were already sick and unemployed
An estimated 16 million mis-sold PPI cases in the last decade

The alarming rate of these illegal activities and amount of evidence that showed up has led to the banks losing the case thus allowing many of mis-sold victims to get their money back. This victory meant that the lump sum and all consecutive payments with interest due to mis-sold PPI will be returned to the victims. If you’re currently under a plan with mis-sold PPI, all PPI payments will be returned and future payments plus interest will be cancelled.


If you were mis-sold or have reason to suspect your current or previous loans then you can rest assured that the ombudsman and the courts will be in your favour. Just remember to keep your documents ready, work with your local authorities and be patient with the process. You may also seek the help of a PPI info claims company, but they will be taking some of the money you receive.  It may take some time, but it may well be worth it as your claim may even be repaid with additional compensation.