If you are going for a loan from a bank or a lending institution, chances are high that you would also be sold a PPI or Payment Protection Insurance cover. This covers the loan or the repayment of debt in case the borrower is not able to meet them in situations where they are not able to work, like death, illness, disability or accident.
Since selling this PPI cover is a profitable enterprise for the banks and lending institutions, many a times these are bundled into the loan without proper knowledge and consent of the borrower. The premium of this cover is hence included in calculating the mortgage payment.
In cases like these, the borrower has the right to file a claim to get a refund on the PPI or Payment Protection Insurance cover amount paid. If the loan has been running for many years, the borrower could end up saving thousands of pounds through the claim.
If you are a borrower, check your loan document for a disguised or obvious loan cover payment. You may file the claim for mis sell of PPI in the following cases:
- You have been coerced to sign up for a PPI by your lender
- You were not made aware that you are signing up for a PPI
- You do not need a PPI but you were wrongfully advised by your lender to go for it
- You have not been explained the exclusions of a PPI
- You were made to believe that buying a PPI would help you get a higher credit
- You were not explained that there is a cost attached to the PPO
- You were not explained that PPI is an optional add-on to your loan
- You were not made aware of the fact that PPI cover would end before your loan period.
The above cases provide you a comprehensive list of situations where you could suspect an event of a mis sell of a PPI cover. If you are not sure about your suspicion, you could write to the Financial Ombudsman Service to guide you.
What is the remedy available to you in case you suspect mis sell of a PPI? You can file a claim for refund of your PPI, on your own or with the help of a claim management company also known as CMCs.
If you choose to file the claim on your own, it is a very simple and easy process. You need to complain to the lender in writing first. It is preferable to complain using the format provided by the Financial Ombudsman Service. The lender needs to revert within eight weeks of the claim.
The lender either may give the final response or may even ask for additional time to respond giving appropriate reasons as to why they need more time to look into the matter.
If you are not satisfied with the response of the lender, you may choose to raise the matter to the Financial Ombudsman Service. The Financial Ombudsman Service would then look into the matter and give the final decision on the claim.
If you need assistance in filing claim, the CMCs make your work much easier. Some of these CMCs charge you an upfront fee for fighting for your claim while others work on a no-win-no-fee model. Some of these companies file your PPI claims for a compensation at 15% of your claim amount.
Some statistics say that on an average the claim amount is of 2500 pounds. Since it is a part of your hard-earned money, there is no reason to lose it to lending institutions.