Mis-Sold PPI: How to Claim

When people take loans of any sort, i.e. whether consumer loans or corporate loans, there is a high probability of being sold the insurance policies made to cover your loan payments in case you become unable to pay your loan back.

 It is a broader term used for different sort of insurance policies, but basically the idea behind it is simple; when you take a loan you have to pay it back and if due to some unforeseen circumstances you become unable to pay it back, this policy will enable you to cover your payments in a timely manner. It usually covers your payments in an event of involuntary idleness, like you losing your job or not getting a job, but sometimes also covers your payment in events of illness or accident. Due to this uncertainty attached with the repayment of loans, they are usually sold along with the insurance.

To find out whether you have been sold PPI, go through all the paperwork which was done at the time of taking loan. If you have been sold the policy it must be somewhere reported on the contract papers. If you do not have the contract papers with you or are unclear about anything, then you must contact your lender or the finance sponsor. Given below is a list of questions that will enable you to identify that you were mis sold PPI, if you have negative responses for these questions.

Although the idea behind the policy was to facilitate the borrowers, some lenders and the finance sponsors used it for their benefits. The most common reasons or ways of mis selling the policy are as follows:

·         You were told that the acquisition of the policy along with the loan is mandatory

·         You were advised to take this policy so that you end up getting more loan

·         Sometimes it is added in the contract without your knowledge of it

·         You were retired, i.e. above 65, temporarily unemployed, not self dependent, i.e. may be below the age of 16, or had any other health related issue

·         You already had other loans

To facilitate the borrowers and save them from any further damage the Financial Services Authority (FSA) had made some guidelines, which all the lenders and the issuer of the loans and insurance policy have to follow. If anyone violates these guidelines, they will be penalized and the borrowers can claim PPI policy. The borrowers can go through the guidelines and then determine if they were mis sold. On being mis sold the policy they can first contact their lenders on their own and try resolving the issue. If this fails to work then they may formally PPI claim charges back with the help of legal advisors.