Hello, Good day,
I’ve been seeing a lot in regards to this Payment Protection Insurance issue recently, so I’ve taken it upon myself to put in the research and find out exactly what’s going on with it.
Payment Protection Insurance – What it does
Payment Protection Insurance was an insurance sold to consumers by Banks/ Building Societies / Insurance Brokers / Finance Firms / Car Dealerships – This insurance was originally sold on the benefit that it would carry on paying your Loan, Credit Card, Car Finance, Store Card and various other sources of finance in the event that you could not work due to accident, sickness or unemployment.
How the mis-selling came to light?
There is much speculation around the reasons this insurance could be mis-sold. The main issue was that it was mis-sold by that many different banks and finance companies that thousands upon thousands of people didn’t know they’d been mis-sold.
Eventually (as when you mis-sell a product to a massive percentage of the population) people began talking, friends discussing the various different issues they’d experienced with the insurance… and then the complaints came rolling in.
The insurance has been mis-sold for that many different reasons that claims began to snowball – it turns out there’s about 20-30 different ways you could have been mis-sold the insurance and that’s where all of the media attention has come from. This insurance wasn’t just mis-sold on one basis, but on that many front’s it became clear that this insurance would only work for a small percentage of the people who were sold it.
So, how was it mis-sold?
This is the bit where you get shocked and awed.
- The insurance was sold to the self-employed – Only the self employed can’t claim on payment protection insurance because there’s no way to track working hours, performance or sickness.
- The insurance was sold to people suffering from pre-existing medical conditions – Only people with pre-existing medical conditions can’t claim on the insurance as there’s no way to tell whether they adopted their medical condition after they’d purchased the insurance (in which case it would have been void), therefore anyone who had purchased the insurance with a pre-existing medical condition cannot claim on the PPI
- The insurance was sold to people who received sickness pay from their employer – Yet one of the ‘clauses’ in the insurance states that it will not pay out until you’ve used ALL of your sickness benefit – Therefore if you received 6 months full pay and 6 months half pay from your employed in the case of sickness or accident, then you would have to use all of your 12 months sick pay before you could start to make your claim (which could then take another 3 months to come through)