Mis-sold Payment Protection Insurance

Payment Protection Insurance Complaint

In the past if you took out a loan, applied for a credit card or consolidated existing debts there was a good chance you may have been sold payment protection insurance without even being aware of it as it was included automatically in your monthly repayment.

According to the Citizens Advice Bureau Payment Protection Insurance (PPI) can add 20% or more to the cost of your credit agreement. It is estimated in the UK that there are over 20 million PPI policies in force generating in excess of £5 billion of premium income for insurers.

According to the Citizens Advice Bureau (CAB) many policyholders are sold insurance on the back of assurances that it will cover credit repayments in the event of financial hardship. The reality is that many consumers find it very difficult to claim on their polices because of exclusion clauses. A survey conducted by CAB found a massive 85% of people who had attempted to claim on their policies had been refused.

In December 2005 the Office of Fair Trading (OFT) announced that it would be conducting an enquiry into the selling of PPI. In October 2006 the OFT Chief Executive John Fingleton said:

'Following the work we have undertaken it is clear that many consumers are failed by PPI - insurance which gives them a poor deal and often less protection than they think. There is limited evidence the industry is taking steps to improve the situation, but we believe they will not make major improvements to competition in the market. Given our evidence and the scale of this market, our provisional view is that it would be appropriate for the Competition Commission to investigate further.'

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