We shall start by looking at what PPI is, and whether you may actually have such a policy. In short, PPI – or payment protection insurance as it is correctly known – is a term that covers a number of insurance policies. These policies are taken out by a borrower when they enter into a credit agreement – be it a loan, a mortgage or a credit card – in order to give assurance that the consumer has a means of keeping up the monthly repayments should they find they can no longer work. Policies differ in that some cover the holder for redundancy while others are geared towards accident or sickness related loss of earnings, and there will also be differences in the length of time for which the agreed policy will keep up repayments.
The controversy surrounding PPI arose when a number of consumers complained to the Office of Fair Trading that they believed they may have been mis sold PPI policies. Indeed, when an investigation was carried out into these complaints it was discovered that mis-selling had in fact been quite commonplace and many high street lenders were at fault. The most common complaint was that of consumers being told they had to take out branded packages supplied by the lender, a practice that has never been so as the consumer was always free to shop around for the best deal.
The result of this was that many well known lenders were handed heavy fines and the regulations have been rewritten. It is now against the regulations to sell a PPI policy to a borrower at the point of sale of the credit agreement itself, and there have been many other changes to the way that PPI can be sold. With so many people involved it was inevitable that claims for compensation would follow, and if you are one of the many who believe that they are entitled to reclaim PPI charges you should seek help from one of the professional solicitors who are specialising in this complex area of the law.