Mis-Sold Payment Protection Insurance – How to Reclaim PPI When Mis-Sold on a Loan Or Credit Card

Payment Protection Insurance, also known as loan insurance, is designed to help you make monthly loan payments in the event that you become unable to do so due to illness or redundancy. Customers who misrepresent their PPI may have their debts erased and the insurance refunded.

It is estimated that 85% of customers purchase protection insurance when they take out a loan, credit card, or mortgage to get redundancy insurance or coverage for critical illness.

Many customers end up paying unnecessary insurance because they didn’t know that their loans had payment protection.

How do you get debt forgiveness help from insurance?

Borrowers may have their credit card debts forgiven if they are mis-sold credit cards loans with payment protection that was not requested or unnecessary.

MBNA was unable to sue a customer in a UK court for non-payment. The judge ruled that the lender had violated the Consumer Credit Act by selling PPI without the customer’s knowledge. MBNA was unable to produce a signed copy the credit agreement in order to prove that it was an enforceable credit contract. The loan was canceled because MBNA had missold the loan insurance.

How to claim PPI Insurance and Save Money

These points can help consumers avoid unnecessary payments loan insurance, or being mis-sold cover.

  • Important to remember that the APR (or interest rate) of a loan does NOT include the cost for payment protection. Consumers should compare the cost of each cover and determine if they are necessary. Sometimes, insurance can be purchased separately for a fraction of its cost.
  • You can cancel your agreement if you are not satisfied with the cost of loan insurance, or if you were unaware that it was added to your loan. Some lenders will let the loan continue without the PPI, while others may charge an administration fee.
  • Some consumers might not realize that they are already covered by another policy. This could mean that they may be paying extra for cover.
  • Ensure that the policy covers the consumer’s specific circumstances.

Misselling list

These points can help you to claim the loan cost if you believe you were wrongly offered payment protection.

  1. Did it make it clear that insurance was optional?
  2. Did you know about any exclusions in the policy? The exclusion that states you won’t get coverage for pre-existing conditions?
  3. Did you know that the loan agreement would require you to make one payment for insurance?
  4. Did you know that if you were required to pay the PPI in one payment, the insurance cost would be added to your loan and you would have to pay interest?
  5. PPI insurance with single premium usually lasts 5 years. Did you know that your loan would be for longer than 5 years?
  6. Did you know that interest would be paid on your insurance premium even after you had canceled?

Inappropriate loan Protection Insurance

You have the right to claim the Payment Protection Insurance cost and have your loan or credit card cancelled.

This can be done yourself, but many people are put off by the responses from banks. Companies can help you recover your PPI, saving you time and effort. If necessary, they will file the case with the ombudsman or to court. Contact Credit Issues if you are denied or having difficulties.