So what actually is PPI? The name PPI stands for Payment Protection insurance. It’s a type of insurance which may be taken along side a mortgage, loan or credit/store card.

Under a PPI policy, an amount of money is paid out each month to cover a full amount or a percentage of you mortgage or loan should you be unable to work. You may be unable to work or pay monthly amounts due to a number of things:-

1)      Becoming unemployed

2)      Involved in an accident of some sort

3)      Becoming sick

In all types of insurance some claims are accepted and some are rejected, but in the case of PPI the number of rejected claims is high compared to other types of insurance. A reason for this is that, as with many forms of insurance, the PPI is not underwritten at the sales stage and is sometimes taken out by customers without careful consideration as to whether it is right for their circumstances and without careful attention to the policy terms and conditions. Individuals who seek out and purchase a policy without advice have little recourse if and when a policy does not benefit them. However most PPI policies are not sought out by people and in some cases consumers claim to be unaware that they even have the PPI.

Do you know whether you have PPI? If not have a look on the paperwork sent to you when you took out a mortgage, loan or other finance agreement or view your monthly statements which may state payment protection insurance or something along these lines. If your still unsure, try contacting your finance provider and asking them whether you have PPI or not.

Many high profile companies have now been fined in selling PPI without the customer agreeing to it and the amount of claims for mis- sold PPI is now increasing.

Many people are paying for PPI without actually realising what it is or wanting it thus causing expensive payments which you will never be able to claim so it really is worth taking a look to see if you have been mis-sold PPI.

If you were sold PPI wrongly, then you have a claim. Staff received bonuses and banks made a lot of money from selling PPI. It was a very big earner and they were consequently very eager to sell it, which is why so many people have it. PPI itself is not a bad product, as it can cover you for loss of earnings if you have loan repayments. However it needs to be sold correctly and it should be properly explained to the customer.

First of all, you should not be sold PPI if you are self employed. Payment Protection Insurance will not pay out in a case like this and no bank should sell it to anyone in this category. If you are retired, payment protection will be useless to you and again you should not be sold it. Any person selling it to you must check this out before you are even offered PPI or any form of payment protection. If you have a medical condition then PPI is useless as the company will not pay out so the sales advisor should also check this before selling it to you.

It should also be carefully explained to you before you take up this type of insurance. Sometimes people were told that it was compulsory to have this insurance and it was a condition of the loan. They then took it out so that they could have the loan. This was not correct and PPI was not necessary; people were paying out when they did not need it for the loan. The sales person should also have made it clear that the PPI could have been bought from elsewhere if it could be found for less money. If this was not explained properly then the insurance was mis sold and the company would be liable for repayment including interest.

A good sales person should also check that you are not already covered elsewhere for loan repayment if you cannot work. Some people are covered through their employment and should not be sold PPI because they do not need it. The sales process should be thorough and check out that you are employed and the type of employment you have. It should be a clear and open process. If it is not, you are entitled to reclaim PPI.

So how are they doing it? If you were mis-sold PPI you are entitled to reclaim it. This has been going on for some time, and not surprisingly banks were fighting to keep the money which had been paid in. PPI is very lucrative – not surprising as many people could not claim it even if they had it and needed to. PPI had been sold to many people who were unemployed, retired, self employed or had a pre=existing medical condition. None of these could actually claim on their payment protection insurance yet many people in these categories were sold it. To the banks, this was money for nothing.

Even worse, many people were paying PPI without knowing it. It was added to loan repayments without their consent. You should be fully informed about any insurance cover on a loan but some people were paying it for years while being unaware that it was added to their charges – if you were offered a ‘fully protected’ loan then the chances are you have PPI. Sometimes people were told that they had to have it when this was not true. They were not told that they could shop around for a cheaper option. The banks made a large amount of money from PPI and staff got lots of commission so it is not surprising that there were some dodgy deals going around.

The customer is fighting back. First people began to complain, then to claim back the money they had wrongly paid out. The Financial Ombudsman ruled in their favour. Not surprisingly the banks objected, and fought every claim. They used delaying tactics and appealed to the courts. However the courts ruled in favour of the customer. If you were mis – sold PPI you now have the right to claim it back. You are also entitled to claim back interest. Banks have put aside money to pay this and are accepting liability.
So this is a success story for the consumer. Banks can no longer sell you expensive and worthless insurance. You can claim back the money that you needlessly paid out. You can also claim for interest, just like the banks do if you borrow money from them. This is costing the banks millions of pounds, but don’t feel too sorry for them. They took the money in the first place – now the customer is fighting back.

2011 was the year when the mis-selling of PPI really came to the public’s attention. The banks and financial institutions had been doing all that they could to resist paying out any of the money that they had falsely taken from people. Fortunately the law came firmly down on the side of the individual, thus opening the floodgates for claims to reclaim PPI. However, there are still vast numbers of people who are missing out on money which is due to them. You may be one of these people and do not realise it, since over 20 million PPI policies were taken out..

So do your homework and make it your New Year Resolution to find out whether or not you may be entitled to reclaim PPI. No excuses that it all happened a few years ago and you have finished paying the insurance anyway. You are still entitled to reclaim. Do I hear you say you have lost your paperwork? Again this is not a barrier to applying for a reclaim. You may also be thinking that you never had any paperwork, but you are sort of sure that you did take out a policy. Once more do not let this put you off, you can make a claim.

You may be thinking that this is going to be more trouble than it is worth. You should consider therefore that the average repayment has been calculated at £2750, I would suggest that it is well worth your while finding out more.

Finally you may be thinking I do not have a clue how to go about this. It could not be easier either online or by telephone, then the work will be done for you. If you want to pursue a claim yourself all the documentation you need including blank proforma are readily available.
So your PPI resolution is to be an active one, not one that you make and then forget. At the end of the day you have nothing to lose, but all to gain.

Mis sold PPI?

Do YOU have a mortgage, personal loan or credit card loan which was taken out in the last 10 years? Then read on because you may have been mis sold PPI.

If you have taken out any of the above type of finance deal in this time span then the mortgage broker or finance company representative may have added PPI on as a lump sum payment in advance or may have added the insurance and you are paying it monthly as part of your monthly mortgage repayment.  They may not have even mentioned the term PPI to you and you may still be in blissful ignorance about the fact that this insurance exists.  YOU could be entitled to claim.

When you applied to take out a financial package were you told that you would be more likely to get the money that you were seeking if you took out this extra protection, thus leading you to believe that without it your claim would be likely to fail? YOU could be entitled to claim.

When you made your application were you told that it was compulsory to take out PPI?  YOU could be entitled to claim.

When you were advised to take out PPI were you informed that you could shop around for the best deal to suit your personal circumstances?  Or were you led to believe that you had to take the deal being offered to you? YOU could be entitled to claim.

Were you unemployed when you were sold PPI? YOU most certainly are entitled to claim.

When you were sold the insurance were you on a fixed term contract in your employment? YOU most certainly are entitled to claim.

Were you suffering from an existing medical condition which might result in a later claim? YOU most certainly are entitled to claim.

Were you retired or about to retire within the period of PPI?  YOU most certainly are entitled to claim.

Was the period of your financial agreement longer than 5 years?  YOU could be entitled to claim.

When examined in detail are you paying a lot of money for PPI?  It could be the case that the policy you have been sold is almost worthless to you because the amount you are paying outweighs any relief you might get on making a claim. YOU could be entitled to claim.

Do you think that  you may fall into one of the above categories but your loan is now paid off so it is not worth your while applying?  YOU are still entitled to claim.

As your loan is now paid off do you no longer have any paper work?  YOU are still entitled to claim.

So if this refers to you here is a simplified explanation of some confusing terms.

ASU or Accident Sickness and Unemployment Insurance – this is another term for PPI.

BBA or British Bankers Association – all lenders are members of this.  You may come across this in your documentation.  Basically their role is to take the side of the financial companies and banks.

CPI or Credit Protection Insurance – this is another term for PPI.

FOS or Financial Ombudsman Service – this is an independent body whose role is to deal with disputes between individuals and banks and other lending agencies.  This service can only be used if the financial institution has attempted to resolve your complaint and you are unhappy with the outcome.  It is to your benefit to have knowledge of this body as they are able to make decisions and judgements which must be adhered to.

FSA or Financial Services Authority – this is the government regulatory body for banks and other financial agencies.

FSCS or the Financial Services Compensation Scheme – by the time many claims are made the original lender has gone out of business.  If this affects you do not worry you can make a claim through this agency.

LPI or Loan Protection Insurance – this is yet another term for PPI.

Single Premium Policy – this is where you had a lump sum added on when PPI was taken out.  As it is not being paid monthly it is easily missed.

So there you have it a clear explanation of some baffling terms, if you are not a financier, you need not be afraid of them any more.

Over the past 10 years finance companies, banks and other financial institutions have been selling PPI (Payment Protection Insurance) to customers.  This insurance was designed to protect people if they were unable to make repayments.  This was all good and well, but unfortunately, millions of people were mis-sold PPI and millions of pounds have been repaid and many millions more are outstanding.  This glossary should help to clarify some of the terms and procedures.

Accident Sickness and Unemployment Insurance – another name for PPI, you may unwittingly not realise that the same conditions apply as with PPI.

Compulsory – it was never obligatory to take out PPI, there was a choice.

Credit – a sum of money offered to allow an individual  to make a purchase

Cut – the amount of money that a firm will take from your winnings.

Licensed – all companies working in the field of PPI recovery are required to be licensed.  This should be checked out before starting proceedings.

Loan Protection Insurance – yet another name for PPI, also the same conditions apply as with PPI, you may be unaware of this.

Lump sum – a single payment of money in place of many, a great number of people have found that their PPI was added at the beginning of the transaction, so that it was paid up front.  This does not mean that the amount cannot be recovered.

No-win-no-fee – agencies helping people to establish their PPI position will only charge if they are able to recover money for someone.

Optional – the person making the purchase had the right of choice to buy into the scheme.

Percentage – this is the rate per hundred charged.  Before committing to a company insist on knowing what percentage cut will be taken

Pre-existing medical condition – –where the person taking out the insurance already suffered from a condition, this group were never covered by PPI.

Reference Number – this number will be present on any finance agreement where you may have been sold PPI.  It is all you require to instigate a claim.

Retired – no longer working, this group were never covered by PPI.

Self-employed – a person who works for themselves, this group were never covered by PPI.

Shop Around – the person making the purchase had the right to check other providers before accepting a PPI offer.

Unemployed – a person who is not in employment of any kind, this group were never covered by PPI.

If you think you have been Mis sold PPI then check out the below terms to see if they apply to you;

Accident Sickness and Unemployment Insurance – another name for PPI

Credit – a sum of money offered to someone to allow them to make a purchase.

Interest – an amount repayable on top of the original sum borrowed.  This is usually calculated as a percentage either monthly or weekly.

Insurance – a contract taken out to protect a person should matters go wrong.

Loan – a sum of money loaned to a person by a third party

Loan Protection Insurance – yet another name for PPI.

Lump sum – a single payment of money in place of many.

Malpractice – professional misconduct on the part of a company.

Mortgage – a sum of money offered to a person to allow them to purchase property

Optional – the person has the right of choice to buy into the scheme

PPI – Payment Protection Insurance.  This is the policy people took out to protect themselves if they were unable to repay credit.

Pre-existing – a situation already in place beforehand.  In PPI terms this referred to medical conditions which a person already had before they took out the insurance.  If this condition later caused the default then they would not be covered.

Self-employed – a person who works for themselves.

Single premium policy – a lump sum added at the beginning of the agreement.

Unemployed – a person who is not in employment of any kind.

After reading this things may have become clearer.  Who knows you may now even be considering that you are one of the millions affected by this scandal.  If so do read the “After” Glossary.

When it comes to PPI, there are a large number of financial terms which many of us have never heard before, and so not know what they mean. To help the person in the street who is not a financial expert, I have put together a few of the commonest ones, along with a simple explanation.

PPI – this stands for Payment Protection Insurance. This is insurance which is sold along with a loan, mortgage or credit card, so that if you cannot repay the original loan, for example if you lose your job, the repayments are covered.

FSA – this stands for Financial Services Authority. This is a government authority which has the power to regulate the banks and other firms who sell financial products such as payment protection insurance.

Financial Ombudsman- this service was set up to deal with complaints about most areas of financial services. They have the power to make a ruling in the case of a dispute, provided the bank or other financial organisation has had the opportunity to resolve the dispute first. The financial ombudsman is impartial.

BBI – this stands for the British Banker’s Association, a group which also includes foreign banks and has over 200 banks as its members. The BBI is the voice of British banking and its role is to promote and defend the banking industry. The BBI fought the court ruling about repayment of PPI before it decided to accept it.

CPI – this stands for Credit Protection Insurance, and is basically PPI under another name.

LPI –this stands for Loan Repayment Insurance and again this is PPI under another name.

FSCS – this is the Financial Services Compensation Scheme. If the bank or financial company you have a problem with goes bust, you can still claim your compensation for money owed through the Financial Services Compensation Scheme.

T and C – this stands for terms and conditions. Before you can claim mis-sold PPI payments, you will need to know your terms and conditions for the insurance. If you do not know your T and Cs you can obtain a copy from the bank or financial company who sold you the insurance.

The Lending Code – this is a code of practice whereby banks and financial companies agree, among other things, not to mislead the customer, to be responsible when lending money, and to act when things go wrong. They all agree that staff are trained in the Lending Code. This is a voluntary code but most banks have signed up to it.

What is PPI?

Firstly, what does PPI mean? PPI stands for Payment Protection Insurance, and this refers to a type of insurance policy which is meant to protect you if for various reasons you can’t pay back a loan or mortgage, or cannot make the monthly payments. For example if you are made redundant, then PPI could protect your payments on a loan such as a car loan or mortgage. PPI can be useful for some people, sadly many people have been sold PPI when they couldn’t claim on the insurance, or did not need it. Even worse, some people have been paying PPI when they didn’t even realise that they had it.

If you look into claiming back your PPI you will come across the initials FSA. These initials stand for Financial Services Authority and they are an independent body which regulates the financial services in the United Kingdom. They have supported the customer in the PPI debacle and have decreed that anyone who was sold PPI when they did not want or need it are entitled to claim it back. Furthermore customers are entitled to claim interest on the money owed.

Apart from the PPI what else is in place to help those mis – sold PPI. There is the Financial Ombudsman. What is the role of the Financial Ombudsman? The Financial Ombudsman is an impartial body who can settle disputes between consumers and financial organisations such as banks and Insurance companies. The consumer must try to settle any dispute with the financial organisation itself first. If this dispute cannot be resolved, then the Financial Ombudsman can step in.

The banks or credit card company who sold PPI are in the BBA- the British Banker’s Association. The BBA brought a court case against the FSA ruling that the banks should repay any PPI which was wrongfully sold with interests. They lost the case and now they must pay back with interest monies owed to successful claimants. The BBA decided not to appeal the court ruling.

To make it even more confusing, PPI has other names. Credit Protection Insurance and Loan Repayment Insurance are all PPI under another name. So if you have any of these products, you may not realise that you have PPI and the banks are under no obligation to inform you. It is up to you to check your policy and then to go ahead and make a claim.
Hopefully this short explanation will help you understand more of the jargon which surrounds PPI and understand if you can make a claim.