Payment protection insurance is one of the most popular forms of insurance among majority of people in UK, especially working class people. It allows an individual to pay off his debt installments, if he is not able to repay his dues on account of reasons covered in the PPI policy. Due to this important benefit, most of the people carry this vital coverage. Unfortunately, most of the policyholders are mis-sold PPIs by their lenders or banks.
All financial institutions, credit card companies and banks have to follow strict rules when they offer PPI. In spite of strict rules, incidents of mis-sold PPIs are common these days. Mis-selling of PPIs is a growing concern, and attempts are made by FSA to control and curb incidents of mis-sold PPI.
How was PPI Mis-Sold?
While applying for a loan, many individuals are informed that their loan application will be accepted if they buy a PPI policy. This is to ensure that the lender will continue receiving installment payments, if the borrower fails to make repayment due to sickness, unemployment or other reasons specified in the PPI policy. It may appear logical to the borrower. However, it is illegal because lenders never inform the borrower that it is the interest which gets paid out of the policy and not the principal amount. If you apply for a PPI policy without being aware of what protection means, you may be a victim of mis-sold PPI. A PPI policy must be offered separately without any condition.
Thankfully, you can find out whether you are a victim of mis-sold PPI or not. If the lender did not inform you about exclusions like pre-existing conditions, you can claim refunds on mis-sold PPI for not informing you about these exclusions. Similarly, if you were not informed that the amount of premiums will be added to the loan along with interest, it is an incident of mis-sold PPI.
The good news is you can claim refunds for mis-sold PPI. The UK law has passed a provision which states that lenders have to refund claims for mis-sold PPI to policyholders. The process of reclaim is outlined by the Financial Ombudsman, and lenders have to settle the claim within eight weeks of receipt of the complaint.
How to Recover Mis-sold PPI
The process of recovering your money back is easy and straightforward. First of all, go through your PPI policy and get familiar with the policy terms. Next, inform the lender that you have been mis-sold PPI stating reasons. Make sure to submit policy documents as well as a claim form while requesting your refund. If the lender does not reply in a satisfactory manner within eight weeks, you can appeal to the Financial Ombudsman about your case. The Ombudsman will go through your case and most probably rule the judgment in your favor.
It is better to be diligent before taking out a PPI policy. Get familiar with the conditions of mis-sold PPI before buying a policy. If you have been mis-sold PPI, take suitable steps and recover your money back.