When taking out a mortgage, personal loan, credit card or storecard, its most likely that you have come across certain insurance policies tocover your repayments if for some chance you are unable…
When taking out a mortgage, personal loan, credit card or storecard, its most likely that you have come across certain insurance policies tocover your repayments if for some chance you are unable to work or maderedundant. These insurance policies are known as PPI (Payment protectioninsurance). However PPI have gained bad press over recent years due to amis-selling scandal in which Payment protection does very little protecting. Sohow does one reclaim payment protection insurance?
If you think you have been mis-sold PPI then the first step totake is to contact your bank or whoever arranged your loan and insurance, torevise the policy and highlight why you deserve a refund. Many organisationsoffer help and advice with this initial approach to reclaim payment protection insurancewith sample letters and in-depth advice. Your bank will then accept or rejectyour claim within 8 weeks. However its worthy to note that most banks may bereceiving new claims whilst working on existing requests to reclaim PPI.
In most cases however, you neednt contact your bank. Banks arelegally obliged to contact their customers if they have reason to believe theyhave been affected by mis-sold PPI. Some have recently promised to repay allaffected customers on a “no-quibble” basis. Some reasons for mis-soldPPI can be down to banks systematic failures such as:
· Call centre staff giving theimpression that borrowers will only be accepted for their loans if they signedup for PPI
· Training staff wrong
· Automatically including the costof the policy in the loan repayment quote
Even though Banks are obliged to contact you, it is still wise toproactively seek to reclaim payment protection insurance due to the number ofnew claims or if your situation isnt being looked into.
The main problem with PPI is that there are over 20 millionpolicies within the UK alone which generate billions for credit providers.Insurance is not included in a loans APR. So it may appear cheap on thesurface. Also, premiums are often placed on the front of the loan so you end uppaying the interest on them during the loan period. Some claims dont evenallow you to make a claim after the 12 month period whilst you continue to payyour premiums.
Some companies offer services to reclaim payment protectioninsurance in which you discuss your eligibility and where you were mis sold PPIbefore being given a complaint letter to forward onto your bank or loanprovider.