Payment protection insurance (PPI) is also commonly referred to as loan repayment insurance, credit protection insurance, and credit insurance. A PPI will basically insure the borrower that should he or she loses their job, becomes disabled, dies, or experiences any circumstance that makes them incapable of paying their debt, they will still be able to pay off their loan thanks to the payment protection insurance that they’ve availed.
The Purchase of PPI
Previously, many people purchased their PPI from a number of banks and credit lenders when they took out loans, credit cards and mortgages. Some wanted to purchase it despite the additional cost on their monthly repayments as they believed it was a good insurance. For some it was, but for many, such as the retired, self-employed and those who were already suffering from illness, it was useless. They would never have been eligible to make a claim based on those reasons yet the banks still sold it to them knowingly.
The Issue with PPI
The real issue here is that PPIs have been frequently mis-sold over the years. This lead to a lot of problems for policyholders since they were incapable of making a claim on the insurance they thought they were protected for and had been paying for.
Furthermore, the mis-selling was so widespread and systematic, that banking staff untruthfully told customers that the insurance was mandatory. In some cases, the lender automatically added the PPI to accounts, with the customer not even knowing what they were paying for.
The Consequences and Action
When the mis-selling scandal came to light, the laws of the land meant consumers had enough rights to be able to get their money back from the banks. People can file a claim for a PPI refund.
There is no guarantee that all PPI claims will be successful, but if the PPI claim does win, then the claimant or the policyholder will still be able to reclaim on average the sum of £3,000 from the payment protection insurance policy they have been paying a long time for. For more information, go to http://www.oraclelegal.co.uk/ppi-claims.