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PPI

PPI


What is it?

Payment Protection Insurance (PPI) was a type of insurance used to help customers who had taken out a loan or credit. It would cover any repayments in a situation that compromised their income, such as illness, disability or unemployment. This should have been an optional extra, however in most cases it was included in the loan, and often people didn’t even know it was there.

Types of PPI Claims

There are 2 types of PPI claims:

You were mis sold
PPI


You were mis sold the PPI if you experienced one of the following:

  • You were pressured into buying PPI or told you must have PPI.
  • You were promised a cheaper rate if you bought PPI.
  • You were told your loan or credit application was more likely to be accepted if you bought PPI.
  • PPI was added without telling you.
  • You were advised to buy PPI that did not suit your circumstances or needs.
  • You were self-employed, unemployed or retired but advised to buy PPI.
  • You had a pre-existing medical condition at the time of buying PPI, which may have affected your ability to make an insurance claim.
  • You were advised that a pre-existing medical condition was included in your PPI policy (or advised that it wasn’t included).
  • It was not made clear that you would pay interest on the PPI if it was added to your loan.
  • It was not made clear that the PPI would end before the loan or credit was repaid.

You were not told the provider was being paid a high commission


You can now claim back some of the money you’ve paid for PPI, if the bank or other provider earned a high level of commission from PPI but didn’t tell you this when you bought it.

  • New rules that mean banks and other providers have to consider complaints about commission they earned from the sale of PPI. These rules followed a Supreme Court decision in Plevin v Paragon Personal Finance Limited in 2014 (usually called just ‘Plevin’).
  • A bank or other provider was usually paid ‘commission’ by the insurer, as a reward for the sale of PPI. If you had PPI, the money for this commission would come out of the payments you made for the policy.
  • A ‘high level of commission’ typically means it was more than half of what you’ve paid for your PPI policy.
  • You may be eligible to get back some money if your PPI policy covered repayments on a credit agreement – like a credit card, loan or mortgage – and you:
    • took it out before 6 April 2007, but it was still open on or after 6 April 2008 (even if you had stopped using it)
    • Took it out on or after 6 April 2007 (whether or not it was still open on or after 6 April 2008)

 

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