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PPI and you
We recently looked at the court ruling on PPI – payment protection insurance – which found that millions of borrowers had been mis-sold insurance cover on loans or credit cards.
This is a huge victory for consumers and it opens that way for up to three million customers to get a refund on PPI they have paid, plus interest.
The banks will not only have to pay out to complainants, they will also have to re-examine PPI sales since 2005 and assess them, even if a customer has not complained. The Financial Services Authority (FSA) estimates that compensation could total £4.5 billion. So far, more than one and a half million PPI claims have been made, with payouts averaging £2,750
Of course, there’s nothing wrong with PPI in itself – it has helped many policy holders who have found themselves in a time of crisis, such as unemployment, and unable to cover essential loan repayments. The problem arose from a culture of high sales commissions where many borrowers were pushed into taking out PPI they did not need. Some were sold it when they already had cover for sickness or accidents through work sick pay ad in many cases, borrowers were not given basic information about the insurance and may not even have realised it was bundled in with their loan.
If you think you may have a claim, contact the bank or organisation that sold you the insurance. If your claim is rejected, or does not reach a conclusion within eight weeks, then contact the Ombudsman on 0300 123 9123, or visit the financial ombudsman.org.uk
Chartered Financial Planner