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Finance Mis-Selling Claims (PPI)
PPI FAQs What is Payment Protection Insurance ? Payment Protection Insurance (PPI) is a form of insurance taken out to cover the payment of a specific debt. Traditionally, a PPI policy is meant to cover repayments of the attached debt should the customer fail to be able to meet the payments due to loss of income through redundancy, unemployment, illness or disability. A policy may typically pay out after a deferred period of 1, 2 or even 6 months, and continue to pay for up to a year should the loss of income remain. The most typical forms of PPI are Loan Payment Protection, where your loan payments or more commonly the interest part of the loan payments are met by the policy; Mortgage Payment Protection, where your mortgage payments are covered; and Store and Credit Card Payment Protection, where either your minimum payment or interest payment are covered. Both Accident, Sickness and Unemployment Insurance and Income Protection Insurance are often included under the PPI banner, although these are separate stand-alone insurance products meant to cover a range of debt commitments. What are the issues with Payment Protection Insurance ? Due to the competitiveness of the financial industry, lenders have to reduce their lending rates to attract new customers and retain existing customers. This is causing a drop in revenue due to lenders having smaller margins on loans, credit cards and mortgages. PPI, although sold as a safeguard for customers, may just be seen as a way for lenders to increase their income from selling loans, credit cards and mortgages. Some PPI policies offered by lenders may be unsuitable to customers in certain circumstances. Policies may not be suitable for the self-employed if they only cover redundancy. Some are so full of exceptions and exclusions that customers are often unable to make a claim if the worst does happen. PPI policies sold by credit card companies, banks and lenders can be overly expensive and are sometimes forced upon the borrower as part of the approval process or hidden within the debt repayment schedule. Debts may be increased by up to a third when factoring in PPI payments. How do I know if I have been mis-sold Payment Protection Insurance? The plain fact is that a number of PPI policies sold to protect customers from their debt in reality offer no protection at all and are simply a revenue stream for the lender. Customers may be unaware they are even taking out PPI as they go through the application process. Lenders may offer low rates that are only commercially viable to them with the addition of a PPI policy and they may also mis-sell PPI policies with sweeping statements such as “Will pay off your debt” or “Will safeguard your family” when in fact the product they are selling may be completely inappropriate to the borrower and offer no such security. Can I claim compensation for Payment Protection Insurance mis-selling ? If you feel that, when you were sold your PPI policy, the salesperson failed to explain exactly what you were purchasing, or you were forced to take out the PPI policy by your lender, you may be able to claim compensation. Also, if you were sold an unsuitable policy while self-employed, unemployed or retired, you may have a case for mis-selling as your circumstances at the time of sale may mean that you cannot claim on the PPI policy in certain circumstances. What is your fee charged on and how do we pay? MK Legal will handle everything from the start to a successful completion. We will deal with your claim on a “No Win No Fee” basis and will ensure you gain compensation without delay so that you are free to get on with your life. Is there anything to pay MK Legal upfront? No. If we are unsuccessful with your complaint you won't owe us a penny and you don't pay MK Legal anything upfront. If you are successful, and only if you are successful, MK Legal will invoice you for a maximum fee of 20% + VAT of the sum recovered. If we recover £2,500 for you the fee will be £500 + VAT. How much am I likely to win? We can't say at this stage but the compensation is likely to be a full refund of the premiums you paid plus interest. Therefore the amount you get will depend on the size of your premium and when your loan started. For example the interest element could be quite substantial if your policy started a long time ago. If the PPI premium was added to your loan, then it is likely the bank will compensate you by reducing your loan balance so the loan will finish earlier or it may be repaid in full and/or you may get cash back depending how far through the loan you are. If I complain will it affect my policy? Yes. In the majority of cases, what we are complaining about is the fact that you should not have been sold the policy in the first place because it was not right for you. If we are successful with your complaint, your compensation will be a full refund of all your premiums plus interest and your cover will cease. How long does the process take? This varies a lot. It could be 2-3 months but if we have to take your case to the Financial Ombudsman, it could be 6 months or longer. However, you do not have to pay us anything until you get your compensation at the end. Can I still complain if I no longer have the policy? You can as long as you still have the policy or loan details and you did not get any payout of benefits under the policy while it was in force. How can I make a claim? To find out more information as to whether or not you could be entitled to make a claim, please complete the Claim Form and we will be able to assess the circumstances under which you were sold your insurance policy and take you through the process of starting your claim. Click here to download our Mis-Sold PPI Article Click here to download our Personal Injury Form
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