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Archive for tag: Questions and Answers on PPI

Questions and Answers on PPI

Although you may have heard a lot about payment protection insurance (PPI) and the impending 2019 PPI deadline, you may still unsure if have a claim for compensation.

Questions and Answers

Many people are cautious, wanting a little more information before they jump into claiming PPI compensation.

As a result, many people call PPI Scotland with questions about PPI, where it can be found and how to make a claim.

Here, we have collated some questions we have been asked recently.

Did I have to buy PPI?

Many people were sold PPI by a bank representative - face-to-face, over the phone or online - and given the impression, or even told, that PPI was a compulsory part of making an application for a loan, or opening and account etc.

This was not the case.

Some people were also told or given the impression that they application for credit was more likely to be accepted should they take out the PPI policy.

This was not the case.

The rules are the same today as they were all those years ago - you do not have to buy anything that the banks offer you at the time you take out a loan or mortgage. Youcanshop around for a better policy and better deal too.

The bank said they wanted their money protecting and so I felt I had to buy PPI?

This is understandable and not wholly unacceptable. However, the important factor to note is that the customer did not have to buy the bank's product.

Many customers already had sufficient insurance cover with other products that they pay for. For example, some people had critical illness cover that provided a lump sum if they were unable to work for a length of time.

Other customers will have had benefit packages with their employer that also meant there would benefit from at least 12 months cover or payments made to them to cover debts such as a loan.

Many banks and their representatives told customers that this was not sufficient, when this was clearly not the case. In effect, many people bought a duplicate policy.

How likely were PPI policies to pay out in the event of a claim?

The pay-out rate for PPI policies was around 15%.

Compare this to car insurance pay out rates with was 80% or over, and you can clearly see the issue.

Not only this, many PPI policies were also slow to pay out too. Various consumer groups pointed out that the claiming process was unduly complicated too.

In effect, it would seem that the banks or lenders hoped the consumer would give up before they managed to claim any money.