healthcareriskmanagementguide.com

Payment protection insurance or PPI as it is commonly known is a form of insurance which is bought by people who seek credit through a loan, credit card or other. What PPI does is protect people with credit against unforeseen circumstances such as unemployment or illness. These circumstances could leave a person unable to pay back what they have borrowed and PPI helps in such a situation. Although there has been a lot of negativity towards PPI recently, that was due to mis-selling which has since been stopped. PPI is now a very safe and very good option for some people.

People who feel that they don’t have a secure job should definitely consider taking out PPI with any credit they apply for. Their employment status could at some point change leaving them without a regular income and thus unable to keep up their repayments. PPI will cover them in such a situation by continuing payments when the person cannot.

What sort of credit also determines whether or not a person should take out PPI or not. Some forms of credit are not secured against anything and so while PPI is a good idea, it might not be necessary. People who are securing loans or cars against their house should seriously think about taking out PPI to stop them from losing their property if anything should go wrong. It rarely comes to such a point but for someone to lose their house when they could have taken out PPI would be extremely unfortunate.

Because most jobs only offer a certain period and level of statutory sick pay, people with a history if illness may want to consider taking out PPI has a precautionary measure. They may be healthy at the time of applying for credit but with most credit periods lasting over a lengthy period, there is always the chance that their well-being may change.

Although PPI received a lot of negative attention, it was not due to the product itself but down to people who were taking advantage of lenient selling guidelines. Now that these have been tightened up, PPI is very safe and an excellent option certain people seeking credit.

Claim compensation for missold PPI.

The payment protection insurance (PPI) mis-selling scandal has been going on for some time now, with the judicial review concluding earlier this year. Banks have been inundated with complaints regarding mis-sold PPI, and have been struggling to stay on top of them. The Financial Services Authority (FSA) has prolonged the timeframe in which banks are supposed to handle PPI complaints already, but doesn’t seem to have relieved the pressure.

The banks had 8 weeks to deal with PPI complaints, according to the original guidelines. Due to the huge volume of complaints received, however, the FSA made a temporary agreement in June with RBS, Lloyds and Barclays, which gave them more time to process everything.

This agreement stipulated that the banks must provide decisions on PPI complaints that were suspended during the recent judicial review by the end of August. The timeframe for dealing with complaints received between the end of the judicial review and the end of August was also doubled, to 16 weeks. For PPI complaints received between 1st September and 31st December, the timeframe is 12 weeks.

The latest reports, however, indicate that these extensions have done little to reduce the workload at the banks’ complaint resolution departments. They continue to work to the target of contacting all existing complainants by the end of the month with a response to their complaint, but most will have to wait another 4 weeks before getting any compensation and may not find out how much they stand to get until they receive the cheque. The guidelines state that, where claims are successful, customers should receive a full refund for any PPI premiums paid, and should also get backdated interest, at a rate of 8%.

If you have sent a PPI complaint to your bank already, they are obliged to respond before the end of the year. If you sent your complaint before 20th April, you should expect to hear back by the end of August.

Find out more about claiming compensation for missold PPI.

Payment protection insurance is a product which is available to people borrowing money as an addition to their monthly repayment. For what should be a small additional amount, the borrower should be covered if they were unable to make repayments due to redundancy or inability to work due to illness or injury. The idea of PPI is a good one however lenders began to exploit the product in order to boost their profits when giving people loans.

It was in 1998 that concerns were first raised about PPI as it was seen to be an unnecessary product for many people who were paying for it. For many others it was simply not worth paying for because of how expensive it was as a percentage of the entire loan amount which people were borrowing. Although concerns were raised it wasn’t until 2005 that PPI was further investigated and found to be a poor product.

The Financial Services Authority had its own concerns about PPI and started to investigate the product in 2005. They researched examples of the product and also used mystery shoppers to experience the selling of PPI in the hope that any foul play would be exposed and that the claims of poor advice and mis-selling could be stopped from continuing.

Citizen’s advice were at the same time carrying out their own investigation of PPI and found some worrying results. Their investigation revealed that the product was not cost effective but also that the majority of people paying for PPI would be unable to claim should they need to because of inclusion clauses. Citizen’s advice’s findings were published as the protection racket report and they also complained about the product to the office of fair trading.

The findings of the FSA backed up what Citizen’s advice reported as well as showing unethical and poor selling practices by lenders. The FSA also reported that many lenders were not providing customers with all the required information so that they could make a sale more easily. What these two organisations discovered about PPI started what has become known as the PPI scandal.

Get more information on PPI claims.

Payment protection insurance or as it is known more commonly PPI was intended to cover a person who has to make loan repayments should they be unable to work as a result of injury, illness or loss of their job. Recently though it has been discovered that many who took out PPI did not really need it and others were sold it without actually being told or asked. This left a great deal of people paying loan payments which were much higher than they actually had to pay.

Many people who took out loans for cars, mortgages or other things were not even aware that they had PPI and it was added to their monthly payment without their permission. The lenders described PPI by offering a ‘fully protected’ loan as opposed to just a loan rather than fully explaining what PPI was and asking whether or not the borrower wanted it or not.

PPI actually added a very large amount onto many people’s loans with between 15% and 30% added onto the loan amount. In most cases this amount was more than the interest which was added onto the loan and it would be almost entirely profit for the bank or loan company. Whilst in a lot of cases the PPI wasn’t needed, in the cases where it was people were still paying out many times more than they needed to.

The mis-selling of PPI has been in headlines recently and many who were mis-sold it have a chance to claim their money back. The chance they have to claim it back depends on where they bought it from though. If they took out an online loan then although the terms were probably hidden, they were still there and this makes it very difficult for them to be successful.

The majority of PPI mis-selling came from face to face sales where advisors didn’t outline to borrowers whether they really needed PPI, how much PPI would cost them or what level of PPI they needed. In some cases borrowers were even told that to take out a loan it was essential that they also purchased PPI even if it wasn’t. In these cases the reclaim success rate is much higher.

Get more information on mis-sold PPI.