A catalogue of bad practice in PPI mis-selling - By: Ronald Kresten

The issue of payment protection insurance or PPI has been investigated at length by the Financial Services Authority (FSA) and there have been some major problems raised about how PPI is sold to loan customers across the UK. On the list of guilty banks are some of the top ranking building societies and banks in the UK and it has been found to be contributing over £1 billion per year to their bottom line. The number of people who reclaim PPI is growing.

PPI is there to protect a borrower if they should become unemployed or have to stay off work due to illness or an accident. In these scenarios the bank or building society will cover the payments until the borrower can resume work. There is a monthly fee for this type of insurance and about fifty per cent of people consent to pay it when buying a loan.

However the statistics show that only 4 per cent of them make a claim and then only 75 per cent of the claims made actually fulfill the terms of the PPI. Over fifty per cent of the lenders had contributed to this by failing to fully explain the terms of the insurance and were also found to be adding PPI to the bottom of the quote without clearly stating it was optional.

It was also revealed by the FSA that some of the lenders were adding the cost of the PPI as a lump sum at the outset of the loan rather than it being paid in monthly installments across the term of the loan. This then meant that the insurance could not be cancelled.

The number of mis sold PPI is vast and many customers are now starting to reclaim for PPI and are having success. At Empire Claims we are expert at reclaiming PPI on behalf of our customers.

About the Author

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