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Archive for tag: PPi Banks

Can the Bank Insist on a PPI Type Policy

Since the scandal surrounding the mis-selling of payment protection insurance (PPI) broke, there have been many changes to protect the consumer and preventing the mis-selling of any financial product in the future.

But, some people are surprised to find that their bank or lender, on asking for a loan, found that they were told they had to have a PPI type policy. Can banks do this?

Yes, but there are caveats…

Banks and lenders have always been able to insist that you take out certain types of insurance policies as part of the application process for loans, mortgages etc. Frequently, it depends on the amount of the loan; in other words, the more money you ask to borrow the more likely it is that you will ask to protect the loan in the case of you being unable to make repayments etc.

However, unlike the early mis-selling days of PPI, there are some differences;

  • You are able to shop around and use the various comparison sites to get the best deal for you, just as you would for any other insurance. You may, for example, find that the bank insists that you take out PPI that includes redundancy cover; in this case, the PPI policy could be expensive and you may find that another insurance product would be better.
  • The bank can sell you their own brand of PPI but there must now be 7 days between the date the loan is sold to you and the date they can offer you their PPI policy
  • If they tell you that their PPI policy is the right one for you, they must supply this as a written letter, clearly outlining why it is the best policy for you

And so, if the bank insist you have PPI on a loan, they can do so BUT the ball is in your court; you shop around for the right policy at the right price for you.

But, can I claim PPI compensation?

Yes you can if you have reason to believe you mis-sold the policy in the first place. There are many reasons why PPI was mis-sold to customers; in some cases, customer were not asked if they wanted it, it was added to their account - even though for many thousands of customers it was not a suitable product!

Can Payment Protection Scotland help you?

Yes we can! We can help anyone with PPI on their account to claim the compensation they are entitled to. Call us to find out more.