Mis-sold PPI? – What’s it all about?

In recent years cases of mis-sold Payment Protection Insurance (PPI) have been on the rise. In our jargon-filled culture, here are tips on how to recognise it and what to do next.

The problems all started when lenders started to abuse their power by selling it to customers it had no chance of benefitting. They were effectively selling a service they had no intention on providing, leading to many people finding themselves substantially out of pocket.

Many firms led people to believe the insurance was mandatory to the loan. While companies are well within their rights to insist a borrower has PPI, it should be an acceptable choice to purchase it from a different, often cheaper, firm. If this choice was not given -or if the lender was left unaware they were purchasing the insurance in the first place- then the PPI was mis-sold.

If any of these scenarios seem familiar to you, it is worth getting in touch with the company responsible. Contact the firm that first sold it to you, regardless of who they may have been representing; there is a useful stencil for this first point of contact on the Financial Ombudsman website. Don’t worry if the loan was cancelled or repaid early. If the PPI could not be cancelled then it is still possible to claim for a refund.

What to do if you have been mis-sold PPI – First, get in touch with the PPI provider. Companies won’t always admit immediately to their mis-sold PPI, so if they haven’t contacted you (as they should have done) it may still be worth following up. You don’t need to pay a third-party to do this for you- the Financial Ombudsman service will help and support you free of cost. The Financial Ombudsman website has letter templates and other useful advice on what procedures to take.