PPI (Payment Protection Insurance) is an insurance designed to cover the cost of monthly premium of loans, mortgages, credit cards, etc, if you are unable to pay your premiums. Such payment defaulting could be due to any accident, illness, or unemployment.
Lenders sell this policy in order to secure themselves. So far, over 20 million PPI have been sold, and it is observed that 90% of them are actually mis-sold. Usually, customers are not informed about this policy, and they end up paying additional premiums.
Can you claim?
If you have taken a loan, mortgage, or even used your credit card in the past 10 years, then yes, you can claim for a refund on mis-sold PPI. You probably have paid or maybe still paying between 13-56% more than what you should actually pay every month. On top of that, you might not even know why and for what are you paying for.
Many people have now realised, this and are claiming for refund. In many cases, they have also been successful in getting their money back. You can claim for a refund by directly approaching the lender, or you can involve a claims management firm to do so on your behalf.
Lenders generally sell PPI in order to protect their money. There are also many cases of PPI mis-selling, where customers have failed to claim the refund. For instance, if you were unemployed, self-employed or retired when you took the insurance then it is impossible for you to make a valid claim. However, below are some conditions in which you can claim for refund.
You can re-claim if:
- The amount of PPI payment was not disclosed, and it was simply attached with the loan.
- You were told that PPI was compulsory to take.
- While taking the insurance, if you were older than the upper age limit of the policy, which is usually 65-70.
- You had an alternative cover that insures your payments. For instance, if you had an income protection, an employer illness package, or a redundancy package.
- You have a PPI that covers a long term loan. This is because most of the insurance policies will run out before the loan is fully paid. Most of the PPI are only active for 5 years. Thus, if your loan term is longer than 5 years than the time limit of your PPI, you can claim the amount.
- The refund offered to you was very unfair and hardly covered the amount that you paid.
- There was a mistake in calculating the right amount of PPI for you, and if you find out that you have paid more than what was needed.
If a PPI was mis-sold to you, then you have all the rights to make a valid insurance claim. With the help of a reputed claims management company, you can possibly get the full compensation that you deserve. Also, if you are not satisfied with what you get in the end, you can approach the Financial Ombudsman Service (FOS) anytime. They will help you out.