Although it was first brought to light in 1998 that Payment Protection Insurance was a poorly valued product being forced on consumers for the lender’s profit, it wasn’t until 2011 that the high court ruled in favor of new regulations against the way PPI could be sold. The majority of people being sold PPI were not even aware of what it was or what the scandal was all about. All the relevant information is compiled below so that you can determine whether or not you were mis-sold PPI.
What Is Payment Protection Insurance?
PPI is an add on to many loans and mortgages that would protect the borrower if they went without work for any period of time, or were otherwise unable to make the regular loan payments. This kept the borrower safe in case they were in a debilitating accident or came down with a serious illness.
The Problem with Payment Protection Insurance
In theory PPI was an incredible thing to have on a policy, especially in an economy where nobody was guaranteed job security. Unfortunately PPI paid out to the lender on a higher scale than interest, so it was in the bank’s best interest to try and give every person who borrowed from them PPI, whether they asked for it or not. There was also the issue of payment, 85 percent of policies never paid out a single pound.
How People Were Mis-Sold PPI
The lenders had a long list of sneaky tactics to sell payment protection insurance to unwitting consumers. In many cases they would imply that the only way to be accepted for a loan would be to take out PPI, without it they would be rejected. When the banks were ordered to pay back the money spent on PPI most people were not even aware that they had payment protection insurance in the first place.
There is a good chance that you or somebody you know has been mis-sold PPI without realizing it. Thankfully there are ways to identify whether or not you were mis-sold PPI and steps you can take to reclaim all of the money owed to you. As part of the settlement, the banks were ordered to pay back every PPI that was taken out without the borrower’s knowledge, so there is no reason you should not receive a refund if you discover you were being sold PPI.