April 30th, 2010Why NOT To Take Out PPI
Payment Protection Insurance is designed to protect consumer’s abilities to repay their debts in the event of something unforeseen. However in recent times, it has been brought to light that banks and lenders are exploiting the product through tenuous loopholes. It has been sold to people who are unaware, cant afford it or want it but don’t know they are ineligible. Most banks cunningly tag on PPI to any loan or credit and bank are pressured with bonus incentives to sell as much as possible.
In theory, PPI is great for consumers, particularly considering the rising rate of unemployment in the UK where people are losing their jobs left right and centre. Ideally, a short spell of unemployment shouldn’t hamper your ability to repay a mortgage, but the reality is quite the opposite; lenders will avoid paying out at all costs, often claiming that an individual is not able to take advantage of the system based on some technicality.
The worst part is that customers are unaware they will never be able to make use of the insurance in the event of an emergency, for example; if you are over 65, employed or otherwise, you could not claim PPI because you are over the age of retirement. If you have a previously documented medical condition, no matter how small, you could not make use of the insurance as you will be considered a high risk customer and as you are more likely take leave on medical grounds. If you are self employed, you are considered a high risk customer, so you will not be entitled to PPI. But in any of these circumstances, banks will have no problem adding it on to a service with no intention of paying if required.
The insurance can make a significant portion of your repayments, to put it in perspective, if your PPI was 30% of your monthly repayments and you had been paying a 250,000 mortgage for 10 years of a 25 year period, with interest this could add up to over 3000 to which you are entitled to reclaim.
Consumers have reported thousands of cases of banks exploiting the PPI system and as a result, all those wrongfully sold it are legally entitled to a full refund. Since a bank will most likely dismiss your claim no matter how many times you ask, it may be easier to recruit a legal professional to do it for you. Doing this can save you all the legwork and give your claim much more authority, most agencies work on a no-win-no-fee basis so you will not be out of pocket. Lenders are now obliged to correctly sell PPI to customers on the premises that they are not overpriced, customers can chose to opt out at any time and they are fully covered after a watchdog ruling in 2009.
There are many loan protection reclaim experts out there to help you claim back your PPI, contact Donns LLP for the best advice