Payment Protection Insurance; could this be the biggest bank robbery in history?

We are now all very familiar with the scandal of ‘unfair bank charges’ and the scandal of the bankers bonuses and government bail-outs, but an even bigger scandal could be the mis-selling of Payment Protection Insurance.

Payment protection Insurance policies are designed to cover the cost of loan or credit card payments in the event of you being unable to continue the repayments due to accident or illness for example.

However, The Refunds Expert is warning that many people are being sold policies that are completely inappropriate for their circumstances.

Derek Andrews of the Refunds Expert explains, “The main problem with PPI is that many people really don’t need the policy they have. The numerous exclusions mean they may not be able to claim and the benefit is usually time-restricted, usually to twelve months. Surprisingly many customers did not even know they had the policy or were told they had to take Pip to get the loan or credit card.

Derek continued, “The Citizens Advice Bureau estimates that there were 20 million policies inexistence with around 7 million new policies being sold each year. This means that, on average, each household has one of these policies.

“It’s been estimated about 60% of PPI policies were related to personal loans and most were sold by high street banks and building societies. A typical premium for a 5 year loan of £10,000 was over £2,000. As this was normally charged as a single premium and added to the loan, the banks would charge interest on it as well. That could make the total cost £2,500 or more!

“In the instance where someone was to make a claim and fortunate enough to escape the exclusions, then the cover would typically only cover the loan repayments for a year. If they claimed for a full year, the repayments may well have been less than the total cost of the policy. In my view is that if people really had understood the costs relative to the benefits, very few, if any would have taken the PPI policy.

“With banks becoming ‘profit centres’ and staff set targets for selling PPI alongside loans, it was little wonder that people were being hurried into taking out PPI under the false impression that the loan was on condition pf taking a PPI or that taking PPI improved their chances of obtaining the loan.

“PPi is also sold alongside credit cards. The policies are designed to cover repayments to the credit card company if the customer is out of work. Again we discovered that many people were unaware that they had a PPI policy or that they had to take out the policy to get a credit card. Many others didn’t appreciate that the policies only cover the minimum monthly payment on the card.

“Whether related to a loan or credit card, the policy should have been explained up front. If it was not, then it may be deemed to have been mis-sold and compensation could be due. This can be a refund of all the premiums paid with interest on top, so it often amounts to £, 000’s

He went on to say, “With so many people affected, this could be the biggest mis-selling scandal yet.

“Awareness of the issue is growing fast and thousands are now coming for help. The average win is over £2,000.00 and one client won £33,000 from First Plus.

“Our aim is to keep the process as simple as we can from the clients point of view and take away all the hassle. Of course, we hope people will use our services. But the important thing is to act now to make sure they are not victims of daylight robbery”