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Archive for tag: The Product PPI

PPI – An Aggressively Sold Product

There are many people - thousands, in fact - all across the UK who have been affected by the mis-sale of payment protection insurance (PPI). But, how did this mis-selling saga turn into such a large scale issue? How did it all begin?

Criticisms of the selling 'process'

Critics of PPI and the mis-selling of it to thousands of customers say that the banks began their aggressive selling tactics when they realised that they could make large profits from the sale of each premium.

When consumer organisations successfully campaigned to stop this selling process, it set off a chorus of complaints but, even when the compensation process started, the banks were returning a miserly 15% of what the customers was actually entitled to.

Pressure mounted from customers, consumer groups, financial regulators and finally, from political parties to look at what people were now labelling an issue that was steeped in 'inflated premiums and anti-competitive behaviour'.

Four-fold criticism

But, the complaints regarding the mis-sale of PPI were grounded in four charges…

I. Expensive - in many cases, the addition of the PPI premium to a loan could add as much as 20% on top of the original cost; in the worst case scenario, PPI added as much as 50% additional costs making some loans for some customers incredibly expensive

II. Ineffective - investigations also found that the chances of making a successful claim in the case of genuine illness using the PPI policy were highly likely to be unsuccessful; in fact, investigations went so far as to say that the policies were structured in such a way as to make claiming on the policy very difficult

III. Mis-sold - commonly, we talk about mis-selling of PPI to customers, using this term to cover all of these criticisms but, in this case, the investigation labelled this as a separate charge against the banks. Many customers, for example, were told it was essential or was sold to people who the bank knew were self-employed, hence were not covered by the policy

IV. Inefficient - the investigation also found that when people did make a claim (or tried to!), the process was a lengthy and complicated one

Have you been affected?

PPI was a policy that was sold on a huge scale to people taking out loans, credit cards, mortgages and other kinds of finance, including in some cases, car finance, store cards etc.

The way that PPI was 'sold' to a customer means that you may not be overtly aware that you were paying, as part of your monthly payment, a premium for a PPI type policy.

Shouldn't you check again whether you have a PPI compensation claim?