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Payment protection insurance (sometimes called loan protection or PPI) covers a loan or debt repayments in the event of certain problems – for example, if a borrower is unable to work because of illness, or if a borrower is made redundant. PPI policies were often sold as part of the deal when consumers obtained loans, mortgages or credit cards. There were options to buy a cheaper stand-alone payment protection policies from an insurance company. Such insurance companies had no direct involvement with the loan,mortgage or credit card provider.
Majority of the lenders have mis sold Single Premium PPI policies
The greatest instance of mis selling is associated with Single Premium PPI policies where the PPI premiums are calculated and added to the main loan. The insurance policy now forms part of the loan and clients end up paying interest on the PPI premium at the same rate as the main loan from the outset of their loan term.
The Financial Services Authority (FSA) has announced a package of tough measures to protect consumers in the Payment Protection Insurance market and ensure they are better treated when buying PPI or complaining about it. This also resulted in the FSA taking action against 22 firms over poor PPI sales practices. This includes the FSA’s largest fine in the retail sector on Alliance & Leicester which was fined £7m in October 2008 for serious failings in its telephone PPI sales.
By following our simple yet thorough Claims Process, Elsworth Associates can assist you to reclaim your money from your mis sold PPI.
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