Knowing what the problems were with the most mis-sold product in
banking history, means that you have a stronger case when it comes
to claiming payment protection insurance (PPI) compensation.
There were many problems with PPI…
1. PPI was expensive
The more an insurance policy covers, the more expensive it tends
to be. PPI offers very little cover but was incredibly
expensive.
The problem was, people were not made aware of their consumer
rights and so were not told they could shop around. This meant that
people bought a poor-vale-for-money product when they could have
got a much better insurance policy, for a lot less.
2. PPI was ineffective
What many customers did not realise at the time they were sold
the policy, was that PPI was structured in a way that made it very
difficult and complex to make a claim.
With an insurance policy, you would hope that in the event of a
claim, they would react quickly. In most cases, insurers do but in
the case of PPI, making a claim was complicated.
If you claim was successful - and this was unlikely - it took
several months for the policy to kick into action. This in itself
is deemed as unacceptable.
3. PPI was mis-sold
Many customers were given the impression PPI was essential and
compulsory.
A bank or lender can insist that a customer protects their
investment or loan with some kind of insurance policy. But they
cannot insist that it is their product and their product alone.
You can shop around and compare policies, probably like you do
with energy prices, car insurance, home insurance and so on.
4. PPI was 'inefficient'
The payout rate on PPI policies was 15%. On car insurance, over
85% of claims are successful - you can see the discrepancy between
the pay-out rates.
The sad fact is, many people thought they had done the right
thing and that they were protecting their debt against a loss of
income. When they became too ill to work, they turned to PPI to
cover their repayments. At a time when they were vulnerable, the
policy did not pay out.
This simply added to their stress and worries, a situation that
was wholly unacceptable.
The time has come to claim your money back
If you have a PPI policy, the chances that it was mis-sold to
you are high. You could claim all your premium payments back, as
well as interest and any costs or fees that were incurred on your
account because of PPI being added to it.
Payment Protection Scotland can help on a no win, no fee
basis.