Just like other insurances, Payment Protection Insurance is used to secure your loan, credit card, and debt repayments in case of unpredictable misfortune or accidents. Just for example, if someone becomes ill and loses ability to pay for the debt.
The plan was to cover the repayment plan of the consumers. Unfortunately, the payment protection was sold in wrong way which had to call indulgence from court and compensation claims for hundreds of millions of rupees.
This is how it was mis-sold
Normally, it was sold to those people who will never be able or even eligible for a claim. This was done without their knowledge. People, who were already covered by other policies, were also a big victim of this.
Chances are that you have been sold PPI if you went to a bank for a loan, car finance, or credit card, before 2012.
The problem lies in the inability of banks and other financial institutions in explaining PPI to its customers. They, too often, miss the key details like what is covered in PPI, whether the customer really needs it, and if the customer would be able to make successful claim.
In most of the cases the banks or institutions directly add it to the loan without customer’s permission or by falsely stating it as compulsory upon taking loan.
How to know if you have a claim?
You can find out whether you have PPI or not by going through the documentation of your loan. If the loan was taken before 2012 then you might not find it in the paperwork.
It should be under the name ‘protection cover’ or something that has a similar sound. This must be an itemized feature on the documents.
Or, you can simply go to the credit provider and ask them for a copy of your agreement of loan. The document should describe it explicitly.
If you figure out that you have a claim then you should be careful about making a claim. There are so many third party companies which can help you make the claim, but they take a big share of your claim. It is not mandatory to make a claim via these third party companies.
Making your claim
The first thing to ensure is that you have all the necessary documentation for making the claim, like:
- The original agreement of your loan or credit
- All the statements from your provider.
- Correspondence between you and your provider, if any.
Now, after collecting all the documents, head over to the provider’s office to initiate a formal compensation request.
The claim letter should attach the following:
- The PPI number
- Date of PPI agreement
- Financial product with which PPI was associated, like the loan or credit card
- Why do you think PPI was mis-sold to you? Like you were not eligible or if your consent was not asked
- All your contact details and of others who are affected by the claim
Plethora of templates is available on the internet to help you out with writing your claim. Alternatively, you can use free internet resources that can help you out with claim resolution.
If it has been six weeks and you haven’t heard from your PPI provider, then it’s safe to assume that they are ignoring you. In such a case and in an event you don’t agree with the given compensation, you should visit the Financial Ombudsman Service.
Does everyone get a refund?
No, this is not the case. PPI was a useful and legitimate product. If you were fully aware of the PPI and you took it knowingly, then you are not eligible for any refund.
People who are falsely sold the PPI are only eligible to receive any compensation.
Do not lose on your claim
Don’t get sold to those companies which are ready to handle your claim as they take astronomical share from it.
You might be allured that you won’t have to go through the paperwork and all the hassle. But, these claims are worth only some thousands of rupees. You might not want to give large money for such an easy process. The process is not much complicated and you can go about it easily.