PPI Jargon Buster

Whilst you may be aware of what PPI is and how it was mis-sold, there is still a fair amount of terminology which surrounds the product and this can be confusing for those who are unfamiliar with financial products.

Considering the fact that the policy was mis-sold following unclear information, we at iSmart feel that no-one should remain unsure about PPI or other protection products which may affect them. Understanding the definition behind different terms is the first step in ensuring that you do not invest in the wrong product so here are a few terms which you should familiarise yourself with:

ASU – this stands for Accident, Sickness and Unemployment cover. It is an alternative name for Payment Protection Insurance (PPI). This means that if a credit agreement you took in the last ten years has this added to it then you could be entitled to claim for a refund.

FOS – this is the official abbreviation for the Financial Ombudsman Service. They are the official independent body responsible for settling complaints about financial services. If we are unable to settle your claim with the bank or lender directly then we may contact the FOS on your behalf.

FSA – this is the official abbreviation for the Financial Services Authority. They are an independent organisation who control and regulate financial services within the UK. They provide clear guidelines for organisations to meet when it comes to working within this sector. They were one of the first bodies to launch an investigation into the mis-selling of PPI.

PPI – this is short for Payment Protection Insurance. It is an insurance policy sold alongside loans and other forms of credit to cover payments if the borrower is unable to do so due to sickness or unemployment. The policy was mis-sold over the past ten years and if you have taken a loan, credit card, mortgage or other financial product in this time then you may be entitled to claim for compensation.

Premiums – this refers to the amount of money charged for the cover by the provider/lender. It is typically represented as a monthly figure.

Single premium policy – this is a policy which is not paid monthly but instead asks for a single lump sum to be added to the amount borrowed when finance is obtained. Individuals who took this type of policy would have been paying interest on the loan and the insurance for the entire duration of the credit agreement.