(Guest Post)
With talk of PPI floating around various media channels, it’s clear that it’s a bit of a scandal of late. But what if you don’t know anything about the basics? Even the uninformed deserve to know what the drama is all about – especially as millions of people across the UK are eligible for hefty compensation. Money you didn’t know about is always a nice surprise, after all!
What is PPI?
PPI, or payment protection insurance, is an additional extra that can be added to loans, mortgages, credit cards and hire purchase agreements. It helps to protect the lender and for the borrower to meet their repayments should their situation change, such as through redundancy; making the payments for them until their circumstances change for the better (or a specified time period comes to an end).
How could it have been mis-sold?
Over the years, banks have had a horrible habit of selling the optional PPI policies to people who either didn’t want or ask for it; perhaps they were ineligible but were recommended to buy it anyway, or it was added to the insurance agreement but the customer wasn’t informed.
How do you know if PPI has been mis-sold to you?
If you have past paperwork, you can easily check. Otherwise, you don’t know for sure, but if you have the slightest doubt, you can make a claim – even if you don’t have any hard evidence. Banks will have everything on record and they will have proof of the mis-selling, if it has happened.
The FSA has instructed banks to inform known victims of mis-sold PPI, with between 4 and 12million letters written in due course. If you’re one of these people you could have already had, or will have, a letter land on your doormat explaining, in concise English, your eligibility to claim.
How do you make a claim?
The banks have already put aside over £13billion for claimants, although the Bank of England has been warned that this figure could almost double to £25bn in total. Last year, the banks paid out £1.9bn and claiming is simple too. You could take on the task yourself or, for absolute convenience, claim management companies like iSmart UK could do the legwork for you.
What’s the situation at the moment?
News about the current stance on PPI is constantly being updated. As it stands, the FOS has employed over 1000 new caseworkers, to deal solely with the increased number of PPI complaints. It goes to show just how many people across the country are expected to be in touch over the next few months to make their case known.
The banks are pushing for a claimant deadline – reported to be as early as Spring 2014 – after which, no PPI complaints can be made. If this is the case, now is as good a time as any to file yours, before it’s too late.
Whether you’re in hardship, saving for a rainy day or wouldn’t mind a spending spree, extra cash is always nice to have – particularly when you weren’t expecting it and when it is quite rightfully yours!
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.