Payment Protection Insurance Policy Claims
PPI Claims are a hot topic of discussion and this is all down to the flawed payment protection insurance policies and the poor behaviour on the behalf of the banks when they were selling these policies. Here is a look at the problems which were found with payment protection insurance policies and the way in which they were sold to innocent consumers looking to protect their financial interests.
Payment protection insurance was sold in over 20 million different instances across the United Kingdom since the conception of the product and when looking at the policy from the outside it did look like a great deal and a perfect way of protecting your financial status if the worst regarding your income did happen to occur.
The policies were in place so if the customer had monthly repayments to meet on a credit account and ended up losing their income through factors such as job loss or an illness which meant they could no longer work they would then turn to the policy. The policy which was advised to be taken out as a form of financial planning would then in theory cover the cost of the monthly repayments on the loan. The customer would then not fail to meet any of the monthly repayments and avoid issues such as bankruptcy, repossessions and other credit profile
problems. It was particularly recommended to those that did not have back up money in the form of savings or investments which they would be able to turn to in order to pay off the credit or loans.
Despite the policies sounding rather attractive from the outside when a closer inspection was made by all of the terms and conditions which surrounded the actual payment protection insurance policy and more importantly the ability for a customer to make a claim to cover the repayments each month it became apparent that these policies were flawed.
Even though the problems with the policies, particularly the cost of the payment protection insurance compared to the amount the policy would pay out if required being identified through a court case in Bristol in 1992 to 1994 the banks still continued to sell these payment protection insurance policies. These sales were always at the time the credit product was sold until this was outlawed and now banned. But the continued sales of such products did mean that many more thousands of innocent consumers became victims and sold policies that had important problems rooted deep in the way they worked.
The payment protection insurance policies were not just sold to those who wanted them, severely problematic sales tactics where used to force customers in taking out policies that they did not actually want. Following thousands of complaints and the British Bankers Association losing a case in the high court many of these sales tactics have been investigated by the Financial Services Authority and then banned by the Office of Fair Trading and Office of the Financial Ombudsman.
Some of the sales processes which made the customer ultimately feel forced into taking out the policy included the sales advisors at the banks and finance companies telling the customer that the policies were compulsory. This was a lie and it is important to highlight that payment protection insurance policies were completely optional and the customer did not need to take one out to protect their loan if they didn’t want to. Not only was this optional but not taking a payment protection insurance policy out have no impact on the status of your application. Many sales advisors used this tactic and customers took out the policy under the impression that they wouldn’t receive the money which they had otherwise applied for. The forceful nature generally means that throughout the sales process the banks did not check to see whether the customer was even allowed to claim on such a policy if the need ever arose. This is another failure in regards to the bank’s meeting their duty of care and another way in which a payment protection insurance policy becomes mis sold.
Customers who hold a payment protection insurance policy should first check to see whether they meet all of the criteria which was laid out by the policy. If they did not meet any of this then they were mis sold the policy and can make PPI claims to get their money back and can use services such as PPI Claims Management Company. Beyond this they also look at the actual sales process that was used and the tactics the banks used to get the policies sold. If the customer felt forced or never wanted the policy in the first place then it is considered to be mis sold.