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PPI or Payment Protection Insurance is an insurance policy that people opt for to safeguard themselves from losses arising from non-payment, in case the borrower is unable to make the payment on time. These reasons include the death, disability or illness of the borrower, loss of job or any other circumstances that render the borrower unable to repay the payment or debt.
A very flourishing business for those who sell it, PPI or credit insurance has been a part of credit agreements issued by brokers, banks and other lenders for the last 20 years. It is a tool to protect the borrower in case of an unforeseen situation and to avoid the debt from being passed on to the borrower's kin.
There are some dirty secrets about PPI, such as of them being mis-sold, the major infringement of it being professional negligence. The ways through which this mis-selling has taken place are:
n most cases, this mis-selling is a deliberate action by the lenders or the bank. Complaints about these have been mishandled on a large scale, with banks reporting as much as 80 % gross profit margin by (mis)selling these policies.
Sales people, in their effort to sell loans and credits, state that the loans are ‘protected.’ The nature and the cost of this protection were not mentioned and if the consumer raised a question, they asserted either that the cover was compulsory or that the loan would not be issued without it.
With consumer groups helping create a furore about this practice by banks and lenders, refunding of mis-sold PPI has become a possibility. A consumer can claim back PPI with the help of such companies and can also stand to gain from their legal advisors. These advisors are trained to hold negotiations with the bank, as they understand the technicalities completely and are also aware of the consumer’s legal rights.
Companies have also set up online claim processes through which their advisors can assess your claim, helping you track it in a quick and efficient manner. If you have had a mortgage or any other kind of loan in the past, there is a probability that a PPI was clubbed with it. A legal company can help analyse this and claim the amount from the bank.
A PPI claim does not, in any way, affect your credit rating or your chance of applying for a loan. Accurate information along with right guidance can help you get the money back, which was yours anyway.