Payment Protection Insurance, or PPI, is a type of insurance that covers the repayment of loans should the borrower die or face a significant financial hardship.
Although an individual pays for PPI, all monies paid by a claim go directly to the creditors.
PPI has been offered as an additional insurance option in the UK for the last 20 years, and it is typically added on to a loan at the time of the sale (or, in the case of a credit card, at the time the card is activated for use).
PPI can be attached to many different types of loans, including:
- credit cards
- car loans
- business or personal loans from a lending institution
- any type of borrowing from a bank, credit card company, or financer
There is considerable controversy surrounding mis-sold PPIs, which are sometimes tacked on as part of a package without the borrower knowing.
Those who file PPI claims have found they have been misled by borrowers and are seeking compensation for this betrayal. There are several points to bear in mind when filing–or deciding to file–for a PPI claim.
Do You Have PPI?
Many people are unaware they are even paying for PPI. The first step to filing a PPI claim is to verify that you do indeed have this type of insurance and are paying for it as part of your monthly payment.
Alternatively, you may have already paid for it at the time of purchase in a single premium payment.
By meticulously reading all of your loan paperwork, even the fine print (which is often where the PPI add-on is concealed), you can find out whether or not you have been sold PPI.
If you find you have PPI and your loan has been active in the last six years, you can file a claim.
If you no longer have your loan paperwork, don’t sweat it.
All you have to do is contact your lending company and ask them to resend you your loan documents. Once you have them in hand, scour them for a PPI add-on.
If you find you have been sold PPI, you can now file an official claim to recoup some of the money you unknowingly spent. The law is–not surprisingly–complex, and finding a claims company to represent you is a wise decision. With someone working on your side, you have the benefit of legal counsel and the assurance of knowing that a professional is fighting for you.
All you have to give your claims company is your account number and a bit of basic information about you and your loan. There is some minimal paperwork to fill out.
Many claims companies work under “no win, no fee” agreements, which means you don’t pay them unless you win your claim. If your claim is successful, expect to pay your claims handler 25%-39% of your refund, plus any Value Added Tax (VAT).
Under UK law, you have the right to pursue compensation for PPI that was sold to you without your knowledge.
With a trained professional working for you, you can be confident your claim is being handled with the utmost care and efficiency. Remember: it’s your money, and you have legal recourse to try to recover it.