What is PPI? Could you be owed thousands?
PPI stands for Payment Protection Insurance. It refers to a charge that was meant to ensure loan repayments could be made should you lose your job, die, or become ill, meaning you were unable to earn enough to service this debt.
There was however, a great deal of controversy surrounding the way in which banks sold this policy. It was sold to people who could never have claimed under the terms; for example, those over the age of 65 or who were self-employed. According to Which? one in three people were sold insurance that was utterly worthless.
PPI was mis-sold for an extended period of time, and on top of that, around 40 percent of people claim not to have known they even had this insurance.
In recent years, after an array of complaints were made and upheld about PPI, the High Court ruled that any payment protection insurance charge which was mis-sold, must be re-paid and compensation added.
UK banks and PPI
If you were mis-sold PPI on a loan or credit agreement, your bank now has a legal obligation to refund you. Banks in the UK, alongside other lenders, were alleged to have put around £13billion aside to repay the charges and offer compensation to people who had fallen foul of PPI. However, the cost of PPI is still soaring, with £18.4billion now having been spent by the banks on putting right this financial disaster.
In addition to claims for repayment and compensation, banks were landed with huge fines to prevent this type of scandal recurring.
What is a PPI claim worth?
The average PPI claim currently stands at about £3,000 but it can be much more or less. The amount you’ll get back in compensation depends on the terms of the loan, including its length and the amount that was borrowed in the first place.
Who had PPI?
PPI was sold on everything from loans and credit cards to mortgages and was mis-sold for more than a decade. You might have been mis-sold PPI if you had one of these types of loans before 2006.
If you believe you had PPI and it was mis-sold you can either approach the bank yourself or hire a third-party specialist to do it for you.
Today, reports state that around fourth fifths of PPI complaints are upheld, with some level of compensation being made.
What will you receive if a PPI claim is successful?
PPI claims don’t just include the amount you’ve paid out, you’ll also receive interest charges which increase the claim’s worth. If you’ve paid off the loan you’ll be able to claim the full value of the PPI plus interest. If you’re still repaying it, your settlement figure is slightly more difficult to work out as it has to reflect any future costs.
If you think you are a victim of PPI mis-selling for any reason, it makes sense to query it either by going direct to your bank or by choosing a third-party specialist to do all the hard work. Your bank is legally obligated to repay you and you could find yourself several thousands pounds better off.