WHAT IS PPI
WHAT IS PPI?
PPI is Payment Protection Insurance.
It was a policy sold to accompany loans and credit cards to cover your monthly repayments in the event of you being unable to pay them due to accident, sickness or involuntary unemployment. Overall the concept of this insurance would make it a valuable “peace of mind” product, but due to the commissions involved it also became a hugely profitable business for lenders.
PPI ON LOANS
This was normally sold as a “single premium” and added onto the amount you borrowed. Typically the cost of this premium was around 20% of your loan, so a typical £5,000 loan could have had a premium of around £1000 added. Many people are unaware they paid for this as it was concealed within the “all inclusive” monthly payment.
Mr and Mrs Q received a refund of £27,270.63 from Barclays and a further £24,544.55 from Lloyds for mis-sold PPI on a succession of loans they had.
PPI ON CREDIT CARDS
This was a variable payment, which would increase, or decrease depending on how much you owed on the credit card. It could have been added without your knowledge.
Mr K received £34k for mis-sold PPI on his Yorkshire Bank Credit Card.
PPI ON OVERDRAFTS
Lenders would often require an overdraft to be protected by PPI. (Barclays were particularly aggressive in adding this insurance). Similar to credit card PPI, the bigger the overdraft, the higher the cost of the premium became. Many people do not realise that they paid this in their bank charges.
Mr Y received £21,370.31 from Barclays for mis-sold PPI on his overdraft.
MORTGAGE PPI (MPPI)
Many lenders advised customers to take PPI when they were arranging a mortgage, but it wasn’t always suitable for their needs.
Mr and Mrs R were awarded £14,459.47 from Halifax for the mis-selling of MPPI