Payment Protection Insurance

The UK banking tindusry will have severe weathering the financial storm that has been raging since the collapse of Lehman Brothers in the U.S. and the UK stop-down Northern Rock in August 2007. In addition, there were no major changes that affect one of the most important areas of banks' income, the payment protection insurance. In the banking sector has historically estimated around £ 1.6bn per year (2006) from the sale of such policies.
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What is PPI?

PPI, which stands for Payment Protection Insurance is a type of insurance, which will usually include phrases in various forms of funding for a given period of time, if they are unable to meet payments due to illness, accident, redundancy, or sometimes death. PPI can be supplied with the following types of motor personal finance loans, credit cards, store cards, among others.

PPI has become very controversial because of the alleged miss-selling of policies that have taken place. According to Which? independent consulting services to 50% of policies can be omitted from the sale. In some such cases, the lender / insurer had not provided information on the benefits of the policy, so the consumer is often taken out the door without understanding what was really for!

Other examples of how policies need to be miss the sale include the self-employed people who could not claim for redundancy, where pre-existing disease were not identified, which in turn canceled insurance. In some cases the cover has been added to the loan without the knowledge and consent of the consumer.

The cost of PPI

The cost of credit insurance may vary. The usual factors that affect prices are as follows, the type of financing you are considering, the period of the loan, the amount of the loan are, and a company that sold policies. As a general rule, payment protection insurance may be considered expensive form of coverage and allows for substantial differences to the monthly repayments on their loans, as well as the amount that you pay in total.

How many PPI claims are successful?

According to recent statistics from the Office of Fair Trading only one out of five PPI claims policy is really effective.

The recently reported by the BBC, the FSA was not satisfied with the speed with which financial services companies responded to the alleged miss-selling PPI. In 2008, the Financial Ombudsman Service received 25,000 complaints PPI, so that the largest source of financial security-related public complaints. Examples of organizations that have been punished for the miss selling of policies include the Egg credit card who have been fined £ 721,000 and the bank Alliance and Leicester has been fined £ 7m.

I was told by the lender that the PPI was the requirement to obtain the necessary financing needed. Is it true?

First, there is absolutely no obligation to purchase insurance from any company, including the company through which you wykupujące funding.

If you are looking for wykupujące PPI insurance is certainly recommended to look to see if you can get a cheaper quotation, often as separate products are much cheaper than the "packaged" offer provided by the lender. Second, it is not a mandatory form of insurance, and there is nothing in any of the credit agreement to determine that you must have PPI in order to obtain financing, so this is a clear demonstration of where the policy has been miss-sold. In any case, do not let the lender to say otherwise.

It is also worth noting that financial institutions can not offer policies at the same time on the sales of loans, which often are linked, and does not need to be "breathing" between the time of the sale of each product.

I am interested in wykupujące PPI, but do not want to ripped off. What should I do?

The best way to ensure that you have the right policy at the right price is for purchases. Compare prices and different policies that can be easily done on-line by comparing prices in different locations that are available.

Make sure that you can read the small print very carefully, because there are many exceptions to such policies, this allows you to see that you will cover for you.

My PPI policy can be sold to miss me. Can I make a claim for compensation?

It really depends on many factors, such as the circumstances in which the cover has been purchased, the reasons why you think that it could be miss-selling, even if the policy was taken. PPI came under the umbrella of the FSA in 2005, and therefore any policies purchased before this time will not be covered by the current FSA regulations and guidelines.

The claims process has become easier as the size of claims increased. Therefore, most claims management organizations soon be able to identify a valid claim.

However, even if they are successful in claiming it will still be considered to be a good idea to talk with the provider and complain about how the FSA was coming increasingly hard for lenders to potentially miss the sale of this cover.
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