Payment Protection Insurance Mis-Selling

Payment Protection Insurance or PPI as it is more commonly known is an Insurance policy sold alongside forms of credit such as Loans, Mortgages and Credit Cards. The purpose of PPI is to protect consumer repayments should they become unable to work for certain reasons such as death, accident, illness or redundancy. In theory these policies sound great but the reality is that they are not always as good as they claim to be. Payment Protection Insurance has many flaws which include its cost, its low payout rates and the fact that it is often sold to consumers who do not need it, who did not request it and who will not benefit from it.

PPI is an extremely expensive Insurance policy. On a €10,000 loan a consumer can pay as much as €2000 extra just for PPI and on a credit card it can amount to as much as 8.5% of a monthly balance. On a mortgage the figures as you can expect soar quite considerably. On a mortgage repayment you can expect to pay €4.75 a month for every €100 owed on your mortgage. On a €300,000 mortgage over 30 years you will end up paying over €20,000 for this insurance policy.
Payment Protection Insurance policies have a number of exclusions in the terms and conditions which can sometimes prevent a payout. If you have this insurance policy you may not be able to claim if:

• You are under 18 or over 65
• Work less than 16 hours a week
• Are self-employed or unemployed
• Have existing medical conditions
• You are on contract or temporary work

Outside of the above exclusions banks and lenders have come under increasing fire for the way in which they have aggressively sold PPI without following correct sales procedures. Lenders are governed by the Consumer Protection Code which was created to protect consumers’ rights. One of the main conditions of the Consumer Protection Code is that PPI is sold as an optional cover and to consumers who are eligible for it. The problem however is that PPI provides an annual multi million euro revenue stream for the banking industry so compliance is not always on the forefront of their agenda.

Payment Protection Insurance has been mis-sold to consumers in Ireland who will never benefit from it, who did not ask for it and in some cases who did not even know they had it.

If you can answer yes to any of the following you may be a victim of PPI mis-selling:

• You were not in work or self-employed at the time of sale
• You were working 16 hours a week or less when you were sold PPI
• You were sold PPI when you had just started a new job
• You were sold PPI when you were on contract work
• You were was told that you had to take out PPI at the same time as the loan
• You were not asked if you had any other insurance which would cover the credit
• You were made to believe that PPI was compulsory
• You were led to believe that you would receive a better interest rate if you took PPI
• You were told that your chances of securing credit were far greater if you took PPI
• Details of your medical history were not asked
• Details of the relevant exclusions in the policy were not explained to you
• You felt pressured into buying the PPI
• You were sold PPI that promised cover on certain clauses which it didn’t
• You paid upfront for the PPI and it was not explained to you that you could pay for it monthly

If you have Payment Protection Insurance it is advisable to review the circumstances relating to the sale. You may be entitled to thousands in compensation without even knowing it. Would you pay for car insurance if you did not have a car?