For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to customers has been a big issue and the business of reclaiming PPI has boomed, with thousands of customers claiming back the money they spent on mis-sold Payment Protection Insurance. But how were they mis-sold the PPI in the first place and by whom?

One of the biggest culprits of mis-selling PPI was (and maybe still is) surprisingly the main high street banks. Others responsible for this practice are smaller loan companies and finance brokers.

The most common practice for selling Payment Protection Insurance when it wasn’t needed was to simply imply that it you HAD to take it if you were to be approved for the loan you wanted. Many consumers believe what they are told by the ‘professional’, as you would expect, and didn’t question the implication. By doing so, they have ended up paying thousands of pounds more than they needed to through PPI.

Some sales agents and loan officers just outright lied, claiming you had to take out the PPI in order to be approved for the loan and leaving out important facts – including the fact that you simply DO NOT have to agree to Payment Protection Insurance if you don’t want to!

Conning consumers into buying PPI is not the only unscrupulous practice carried out by banks, loan companies and finance brokers. Consider this – only around 15% of claims made on Payment Protection Insurance are actually successfully paid out.

That’s because important questions that should have been asked by the sales agent of the consumer were deliberately not asked. As a result of this, when a claim was made by the borrower due to being made redundant or some other reason that they couldn’t continue to work they found that their PPI policy did not, in fact, cover them.

There are so many restrictions in a Payment Protection Insurance policy that it is sometimes difficult to know how you could ever make a successful claim and by not asking important questions of the borrower, the lenders are almost ensuring that they’ll never have to pay out.

There are new rules in place now, set by the Competition Commission, that state PPI cannot be sold at the same time a loan is agreed. There is a seven day grace period during which the consumer can look for a better deal if they want it and the lender cannot contact the consumer. This restricts the mis-selling of PPI.

However, if you were sold PPI in the last six years – with a loan or credit card for example – and feel that it was mis-sold, it may be possible to make a Payment Protection Insurance claim and get your money back. Making a PPI claim can be done yourself or you can contact one of the companies offering to handle the process for you and get you compensation, which is far simpler.

You can only claim for PPI compensation going back six years, however, so there is a time limit and you should act now if you feel you may be due compensation for mis-sold Payment Protection Insurance.

Author Bio: Ian Grainger is writing on behalf of Hamilton Brady, specialists in PPI Claims.

Category: Finances
Keywords: payment protection insurance, ppi, ppi claims