Lenders can no longer offer PPI at the same time as loans. Consumers who want to buy PPI can choose to purchase a regular premium policy instead. This is because many PPI policies were not sold in accordance with correct practice over the past decade. A huge proportion of PPI claims passed on to the Financial Ombudsman Service are awarded in the consumer’s favour. This indicates the extent of the problem with PPI and gives hopes to consumers who have tried and failed to obtain compensation from their lender. Complaints about PPI have been steadily rising. The FOS has alread informed us that it is dealing with a record number of PPI complaints.
So it begs the question – why are so many people complaining about PPI?
One of the most common reasons for complaint about payment protection is that consumers have felt obliged to take it out. That is to say, the lender would indicate in some way that the loan application would only be successful if the insurance policy was taken out. Some consumers have indicated that financial institutions went a step further by coercing them to take out payment protection insurance.
It is not in the interests of each and every person to take out PPI insurance. Those with a pre-existing medical condition, for example, may not be able to claim on the policy if the condition reoccurs and they are unable to work. Other medical problems are also excluded, for example back related problems and stress. PPI insurance can also be unsuitable if the person is retired. This is because it is very difficult to make a claim on the policy if you could not prove your income and could not prove that you had a full time job.
The monthly repayments when PPI is sold with a loan can be up to 30% higher. This is because single premium PPI attracts interest in the same way as the loan. The main facts about the policy should be disclosed by the lender but this hasn’t always been the case. To make a successful complaint, customers need to find as much information about the policy as they are able to.
It helps if you can find a copy of the loan agreement. With all this information to hand it makes the process of complaining a lot easier. Not all complaints are upheld in favour of the customer. Some complaints are denied by the financial institution. Now the customer has to understand why the complaint was denied and what to do next. The FOS has said that half of all consumers throw in the towel when the complaint is initially rejected. Some people are unaware of what to do next.
Lots of resources are availale on the Internet to help people with pursuing their claim further. To give an example, there are a number of payment protection insurance articles available. Anyone who doesn’t have the time and energy to handle the claim on their own can engage the services of a claims management company. CMCs can handle payment protection complaints usually on a no win no fee basis. The benefit here is that the customer can leave the company to manage the whole affair. They can leave the legal stuff to a professional to deal with while they get on with other important things.
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