Payment protection insurance (PPI) was sold by banks and other lenders to cover up repayments on credit cards and loans in case you were unable to make them. The policy was meant to cover your repayments in case you fell ill or become unemployed while still having an outstanding loan.
However, PPI is a voluntary policy but many lenders did not rely this information to borrowers. Moreover, there are certain conditions that render PPI claims invalid that lenders were supposed to disclose to policyholders, but which they did not. For example, if you are retired or self-employed, a PPI policy will not protect you if you lost employment.
However, many lenders did not disclose this information to borrowers. As a result, policyholders ended up paying for PPI policies that they cannot make claims against. Some borrowers were mis-sold the policy without then realising it while others were told that it was mandatory to purchase the policy. If any of these situations apply to you, you can file for payment protection insurance claims.
If you were sold PPI and were not aware that you had been sold it, the policy ran out before you finished repaying your loan, you were not told your pre-existing medical condition would affect the policy, were not informed that your retired or self-employed status would affect the policy or were told that the policy was mandatory, you have a case against your lender.
The PPI claims saga dates back to between 1998 and 2005 when reports started surfacing that financial institutions and other lenders were using inaccurate sales techniques and selling their polices badly. In 2005, the Financial Services Authority (FSA) stepped in and began fining institutions that war found to have mis-sold policies to consumers. The British Bankers’ Association went to court to challenge the fines levied by the FSA. In 2010, the High Court ruled that the FSA’s fines should stand and the BBA opted not to appeal the ruling. This set a wave of payment protection insurance claims from customers who were mis-sold policies dating years back.
Billions of pounds were mis-sold to borrowers in the UK. According to the Financial Services Authority, lenders had paid over £1.9 billion by the end of 2011. Reports indicate that banks have put aside a massive £7.6 billion to settle anticipated payment protection insurance claims. You can file for PPI compensation on your own or let one of the PPI claims companies do the work for you at a fee.
