Payment Protection Insurance – What Went Wrong?
Should you have read the news across the last 18 monhts you will understand the world wide monetary crisis and how it has hampered many people across the world. In the area of personal finance we have seen many changes, especially when considering loans and mortgages.
The chances are that, also, you have read about how many people are seeking PPI claims and as a result wondered what it means. PPI – short for payment protection insurance – is a troublesome part of a good proportion of credit arrangements which is intended to help the individual concerned in the event that they become unable to work and unable to keep to the agreed deal.
A payment protection policy is a simple insurance policy that is paid for by monthly instalments. However, in recent years the authorities who oversee the personal finance market received several complaints from borrowers who discovered they could have been mis-sold PPI policies, and an investigation was ordered.
Those that carried out the investigation saw that there were several cases of mis-selling of PPI policies, including some which had been provided to people to whom they were not applicable and more in which individuals were not told that they had purchased and were responsible for such a policy.
As a result of the findings of the inquiry several financial institutions – a number of which were highly regarded household names – were handed substantial fines, and the regulations regarding the sale of PPI policies were totally rewritten. Furthermore, many of the individuals affected engaged professional help to make a mis sold PPI claim for recompense, and lots of people are realising that they may be due some recompense for mis-sold polices.
As the new regulations were introduced they stated that there would be alterations to the way in which PPI policies should be sold, and it is now against the rules to sell a consumer a policy when agreeing the loan or mortgage. It is also not permitted to sell the buyer a PPI policy for several days after agreeing the loan, in order to allow the consumer time to shop around for the best deal.
One of the reasons for bringing in the revised regulations was because the investigation found that many people had been led to believe that they had to take a branded PPI policy offered by the lender, a factor that is at the heart of many PPI compensation claim, as it has long been the consumers right to go elsewhere for the right policy.
The personal finance world and, specifically, PPI is now a less worrying place for the customer thanks to the new rules, and should you believe that you have a case for seeking compensation we strongly advise you seek the help of a solicitor in what remains a confusing area of the law.
Filed under: Financial Advice