How To Reclaim Missold Payment Protection

Often circumstances lead a person to take loans or mortgages

. Though it is a tough decision, yet at times, this seems to be the only option to eek out of a difficult situation. Since there are many companies and banks that provides loans and mortgages, taking one is not difficult, the only thing being to choose prudently from amongst the various options. Many customers at the time of being offered the loan or mortgage are also offered insurance for loan protection. This loan protection insurance is a cover against inability to pay premiums for the loan taken, in case of sickness, illness or any other reason.

This loan protection insurance is known as Payment Protection Insurance or PPI. Although there is nothing wrong with the concept of PPI as it offers some level of peace of mind as a person taking this insurance is well-guarded in case he is unable to pay the premiums, yet wrongful practices by some lenders has given it a bad name. From some cases unearthed recently it has been found that customers have been missold payment protection insurance. This means that without the borrowers consent, the insurance was attached with the loan. This led to unnecessary payment on the part of the borrower and that too without his knowledge.

A consumer can safeguard himself against such unscrupulous activities by keeping his eyes open when taking out a loan or mortgage. All the terms and conditions of the contract must be duly read and understood. He should work out the cost cover and if he finds any unnecessary charges levied, he should get it sorted out with the lender prior to signing the loan contract.

However, there may be circumstances when a consumer has been provided PPI without his knowledge and is being charged with the extra premium amount. In case, he suspects foul play, he can claim back PPI insurance, by taking the below given actions:

Discuss the problem with the lender instantly

In case of a failed communication, the complaint can be taken to higher authorities concerned

Details of the contract and correspondence must be kept for further assistance

Time of no more than eight weeks must be given to the financial institution concerned failing which the consumer can approach the financial ombudsman service

A decision by the FSA or the FOB could write off the missold payment protection handed down unscrupulously.

In its inherent nature, PPI is not bad. In fact, taking this insurance assures peace of mind as a person knows that in case of certain mishaps like an accident, illness or loss of job or any other situation, which renders him without work, there would be no obstruction in the payment of premiums on the loan taken. However, it is the misselling of the insurance by the lender without the borrowers knowledge, which makes it the culprit.

by: Franklin Bill

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