It is unlikely that the true statistics on missold PPI will ever be known. Many people who have paid off their loans might not know that they had PPI insurance. Many people won’t know that their PPI insurance was not suitable for them and that any claims they made were destined to fail, which is a classic example of misselling PPI.
This article discusses the tricks lenders play with PPI and the many ways they could have missold you PPI. Are you being ripped off?
Sold a Store Card in a Shop
The chance to get 10% off your shoPPIng can sometimes be too tempting to resist. Before you know it you have signed up for a storecard that charges a monthly fee for PPI, regardless of whether or not you use it. Because it was so busy that day, the shop assistant didn’t mention it. A sales associate with minimal financial training has missold you PPI.
The loan is more than the policy
PPI policies typically last for five years on long-term loans. If you’re concerned that you might need PPI during the loan term, you should shop around to find a policy that covers the entire term. This limitation should be explained by your lender. If they don’t explain this limitation or they promise that the policy will continue for the length of the loan, they may have missold PPI.
One person can hold a joint policy
Many people have been caught unawares by this when they are in financial distress. A joint policy that is held under one name is only valid for the claimant. You have been misled PPI if the lender claims that you both will receive the full benefits, even though you only have one name on the policy.
This policy does not apply to students, unemployed, retired persons
People who are blatantly unsuitable and will never be able claim against insurance are the worst victims of missold PPI.
Unemployed people who took out PPI at the time of the claim will not be eligible. Students and students will also not be eligible. Even working part-time is often enough to exclude you from applying. Most PPI policies will only pay out if you are unemployed and have not held a full-time job. You may have been missold PPI if you were sold a policy, even if you are unemployed, a student, or working part-time.
You will also be denied a claim if the policy was taken out by someone who is older than you. You were misled about PPI.
Doesn’t cover self-employed, or has business limitation clauses
Some insurance companies’ definitions of self-employed are unclear. This can lead to misrepresented PPI. You may not be covered if your company is a limited one. Some policies will only pay out if the company is liquidated (or you are forced to by creditors). You may not be eligible if you are sole trader or if you close your business voluntarily. Always read the fine print. You may have been misled about PPI if it contradicts what you were told.
No inquiry about medical conditions
You should have been informed that insurance is unlikely to be suitable if you have a medical condition that would prevent you from working. This includes things like stress and a bad back. If you weren’t told, and no inquiries were made, then you may have been missold PPI.
There is no discussion about other cover that you may have
Many people have income coverage already through an alternative insurance policy or an employer-income illness and redundancy plan. Lenders should inquire about this. You would have to pay two insurance policies, and you could only claim on one. You could have been misled about PPI if you had other coverage that would cover your repayments.
