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Mis-sold PPI

What is mis-sold PPI?

PPI stands for Payment Protection Insurance. PPI policies are sold with all types of finance, from loans and mortgages to credit cards, store cards and finance for high value products such as cars and furniture. Typically PPI policies cover a person if they fall into financial difficulty as a result of not being able to work due to accident, sickness or unemployment. PPI policies usually pay out for a period of 12 months.

PPI is also sometimes known as Credit Protection Insurance, Loan Repayment Insurance or Accident, Sickness and Unemployment cover (ASU). It should not be confused with Income Protection or credit card cover.

Missold PPI policies are PPI policies that have been sold incorrectly. PPI policies are different from other insurance policies like home insurance, as without extensive training it can be very difficult to determine if the insurance is suitable for a person.

Who was responsible for mis-sold PPI?

PPI misselling is largely down to sales staff at banks, loan companies, credit card providers and other finance companies. Retailers have also been found to be responsible for missold PPI, as it is often offered to customers when they sign up for store cards.

Why was PPI mis-sold?

The Financial Services Authority (FSA) has noted the following reasons PPI was mis-sold:
- There were firms who failed to take reasonable steps to ensure customers didn’t buy policies on which they couldn’t claim or which provided only limited cover
- Sales staff at firms selling on a non-advised basis were giving incorrect advice or providing information that amounted to advice
- Some firms where PPI was mis-sold didn’t have systems in place to assess the suitability of a PPI policy for the customer
- There was an over-reliance on product documentation given to the customer at the expense of the terms of the PPI policy being explained orally. Also many firms selling by telephone did not give sufficient information on exclusions
- General lack of training and inadequate competence of sales staff
- The level and structure of inducements and targets set for sales staff encouraged PPI being mis-sold in some firms

Were You mis-sold PPI?

There are many reasons you could have been missold PPI – you could have been told the insurance was compulsory, you could have already been covered with an alternative policy, or you might not have even known you had purchased PPI.

Were you mis-sold PPI because you were told it was compulsory?

Many customers have been missold PPI as they were told they must buy the policy from the same provider as the loan/credit card in order to be approved. You may have been missold PPI if the salesperson:
- Didn’t inform you the policy was optional.
- Told you the loan would be more expensive if you didn’t take the insurance.
- Implied taking out a PPI policy would help you obtain finance.
- Used pushy sales techniques, so you felt you couldn’t say no.

Did you already have insurance cover?

PPI misselling can occur if you were already covered through an insurance policy, and you were not asked about PPI cover at the point of sale, for example; if you had a separate income protection policy, or if your employer provided an illness and redundancy package. You have a case for claiming missold PPI if you informed the PPI salesperson of your alternative cover, but they insisted you take out a PPI policy as you may not be approved for the finance if you refused

Do the loan and policy term not match?

Before May 2009, there were long term loans being sold with single premium PPI policies which only lasted for a maximum of five years, regardless of how long the loan was for. The salesperson should have pointed out the PPI policy did not cover the entire loan term. If you purchased one of these PPI policies believing the loan and PPI policy matched, then this is an example of missold PPI.

Do you have a joint loan but PPI cover for only one person?

PPI misselling can also occur if two or more people are responsible for paying back the loan, but only one person is covered by the PPI policy.

Was the PPI policy purchased alongside a store card?

PPI policies sold with store cards or alongside car finance are likely to have been sold you by someone with no financial background, and so could easily have missold PPI policies simply due to their inadequate product knowledge.

Were you unemployed, retired or self-employed when you took out the cover?

If you have been paying for a PPI policy that includes unemployment cover and you were unemployed at the time of taking out a PPI policy (this includes if you were a student), this is a certain case of missold PPI as you would not be covered for losing your current job.

Did the person who sold you the PPI policy check your employment status? If not, then this is a missold PPI policy. Missold PPI also applies if you told the salesperson you were unemployed, but they informed you a PPI policy was suitable.

If you were older than 65 at the time of taking out the PPI policy, then most PPI policies have an upper age limit (this can either be 65 or 70) but this would have to be clarified by checking your specific policy. If you were older than upper age limit at the time of taking out the policy, then your PPI policy was definitely mis-sold.

Reclaiming mis-sold PPI Online

If you believe you may have been mis sold Payment Protection Insurance, you may be able to claim back missold PPI if any of the following statements apply to you:

• You didn't ask for it, but it was added anyway?
• You were told the insurance was compulsory or that taking it would give you a better chance of getting the loan.
• You didn't know it was optional or that you could buy cheaper cover elsewhere
• The policy exclusions were not pointed out to you

Mis sold Payment Protection Insurance (PPI) is something that has affected millions of people who have taken out loans and credit cards in the last ten years. For more information about missold PPI you can call one of our specialists on 0800 043 302.

0800 043 3025