Going broke from a mis-sold PPI – It’s up to you not to jump into that situation

So much has gone on since the discovery that Payment Protection Insurance was widely mis-sold to millions of credit consumers throughout the country. For years people have gone broke because of the amount they paid to the insurance policy that never really helped them. Although it was introduced as a safety net for debt repayments in times of sickness, accident, or redundancy, it became more of a burden for a great majority of consumers as banks took advantage of the product and devised schemes to sell it even through breaching regulations.

PPI claims have begun to flood into financial institutions for the past several years. Complaints were made to banks that PPI has been totally useless to them and some were lied to when they tried to claim for cover – told that if they use PPI for the repayments of their debt as they were unable to for the meantime, their credit scores will be affected. What a scam!

mis-sold PPI

Then again, as the High Court ruled that those consumers who were wrongly signed up to the policy will have to be properly compensated, you’ll realise that you now have the opportunity to change the situation. It’s now up to you if you want to let yourself go broke by not taking heed of this chance.

Making PPI claims is not as complicated as some people said it was. In fact if you choose to make a claim by hiring an expert or do it yourself, you’ll follow the same process and go through the same turnaround time. Investigations to prove the mis-selling would usually take 6 or 8 weeks, given that the evidence presented is sufficient enough and the situation is less-likely to be complicated.

To start your claim, you will need to establish the existence of the policy alongside any of your finance agreements – be it on a credit card, loan, or mortgage. Check your documents for any reference to PPI and make copies of them, particularly those that indicate the amount paid to the policy and the duration of its existence. You will need to attach them as proof to your claim.

Then, put your claim in writing, stating how the mis-selling happened. In general, there are a lot of situations where mis-selling of PPI can happen. [Read more…]

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.