Over the last ten years loans and credit card repayments were often sold with Payment Protection Insurance, or PPI to cover the consumer of the financial burden in case they are unable to repay due to accident, sickness or unexpected unemployment. PPI is also sold with mortgages, and covers for similar insurance. It can also be known as Accident, Sickness and Unemployment cover (ASU), Life & Accident, Sickness and Unemployment cover, Mortgage Payment Protection Insurance, Personal Loan Protection or Credit Card Repayment Protection.

There is nothing wrong with PPI policies as a sellable product, and often consumers may want this level of insurance when taking out a large loan or mortgage, but in recent years it has arisen that millions of people have been systematically mis-sold PPI without proper knowledge or understanding that it was being added to their committed repayments.

If someone is mis-sold payment protection insurance they are entitled to claim this money back, often reclaiming £1000’s back in compensation.

The financial ombudsman service is an independent statutory body established by parliament as a financial expert to settle individual complaints between consumers and any businesses providing financial services. It is a free service used where the consumers are unable to resolve by issues on their own.

The ombudsman service deals with a wide range of financial matters, mortgages, credit cards, and insurance including mis sold PPI (payment protection insurance) cases. As the service is completely independent and impartial, it will assess claims from both sides in the event of a complaint. When it has been decided that a consumer has in fact been treated fairly, they will explain why and close the case. If the decision is made that the business has acted unfairly, the financial ombudsman has the power to seek compensation on behalf of the complainants without it going to court.

If neither party agree on the outcome (for example a consumer trying to claim PPI compensation against a bank), the issue is then passed to the courts to decide, however – independent commentators often recommend that consumers use the ombudsman service as the outcome of a court case can often be unexpected and sometimes disappointing.