subject: Are Eligible for a PPI Claim [print this page] Are Eligible for a PPI Claim Are Eligible for a PPI Claim
During these times of economic uncertainty, many of us our feeling the strain on our finances, and with rising fuel costs, rising utility bills, rising food prices, and not to mention the government spending cuts, this is hardly surprising. These added pressures mean that it is important to save money where we can, or to receive financial compensations that we may not otherwise concern ourselves to get. For instance, many people were miss sold PPI during the 1990s and early 2000s, and these people can fight for legal financial redress via a PPI claim. Here we will discuss what PPI actually is, and who is eligible to claim back money from miss sold PPIs.
What is PPI?
PPI is the acronym of Payment Protection Insurance, although there are other names for PPI, such as credit protection insurance and loan repayment, PPI is the most common term. PPI is a type of insurance that protects the borrower from certain eventualities that may prevent them from being able to pay off the loan on time, or even at all. Payment Protection Insurance normally covers loans and overdrafts, and is does not cover credit card debts or mortgages.
Generally, banks sell PPI at the same time that the loan or overdraft is set up. Payment Protection Insurance typically covers the borrower against failure to cover repayment schedules in the event of sickness, unemployment, accidents, and other extraneous factors that may prevent the borrower from meeting the terms and conditions set out in the loan or overdraft agreement.
How to Establish Whether PPI Was Mis Sold:
When banks sell PPI to their customers, they must ensure that borrowers understand that it is not compulsory, but rather an optional extra.
When a borrower opts to have Payment Protection Insurance on their loan or overdraft, the bank must outline clearly all significant exclusions that may render PPI claims invalid, for instance, many policies will not cover the borrower for a pre-existing medical condition. If the bank did not make clear the PPI exclusions, the borrower may be able to claim back any premiums paid on the insurance.
The lender (normally a bank) must make clear several factors regarding the payment of the PPI. Firstly, it must be clear to the borrower that the cost of insurance is in addition to the cost of the loan. Secondly, if the PPI is payable in one single transaction, and there is no option to spread payment over the course of a repayment schedule, this too must be made clear.
If the PPI does not cover the lifespan of the loan or overdraft, the lender must stipulate this to the borrower. For instance, if the borrower opts for a 7-year loan, and the PPI covers 5 years only, the lender must outline this stipulation clearly.
Before the 14th of January 2005, if lenders recommended insurance, they needed to issue a demands and needs statement' in order to justify their reasoning, if they did not, then a PPI claims is possible.
