Millions of people have taken out PPI (payment protection insurance). It is a type of insurance policy which aims to pay for ones existing debts like credit cards repayments, personal loans, and mortgages. It insures the policyholder for one year of debt repayments in case he  or she becomes incapacitated, loses their job involuntarily. Since 2008, the UK has seen a dramatic increase in the amount of claims and refunds directed at banks who sold PPI.

The banks are dismissing complaints largely because policyholders lack the requirements that make them eligible for a refund or claim. An estimated 17 million Britons have payment protection insurance and a large number of these policies were mis sold. The most common complaints involve banks or brokers misinforming the consumers that they were buying PPI.

PPI is usually sold as part of a loan or as an attachment to credit card agreements. However, banks did not tell people that they were selling a separate product from the loans they were taking out; banks presented PPI as compulsory attachments to the loans and credit card agreements signed by the consumers. In other words, without PPI, consumers cannot take out loans or get credit cards.

Consumer Protection Code

According to the Consumer Protection Code, two or more financial products must be quoted clearly and separately in a single transaction or agreement. Under this provision, the banks and brokers who sold PPI as secret attachments to the loans taken out by people violated the law. They were later were subjected to fines exacted by the Financial Service Authority or FSA.

Obtaining a PPI Refund

There are three options when one wants to make a PPI complaint. The first option is to go to the bank or who sold the PPI. There are templates of letters for refund available online, which are presented to the banks in who sold the PPI. Going to the bank is the first option since they are the ones who can directly talk to you regarding the product they sold. If the banks do not entertain you, the second option is to approach the FOS. The FOS functions as a mediator between banks and individuals, and is mandated to settle individual financial disputes. However, because there are millions of individual financial disputes in the UK, going to the FOS to have your case processed will take time. The third option is to approach a claims company. Claims companies have trained experts that are used to handling financial disputes. They represent individuals and go after banks who mis-sold them PPI.

Advantage of Claims Companies

Claims companies are a good option because they do not usually charge an upfront fee if ever you approach them for consultation or assistance in claiming a PPI refund. The claims companies will only ask for a share in the total amount of refund you will get in case you win your case. Usually, the claims company will receive a 25% share in the refund of your PPI claim.

If you want to make a PPI claim, there are websites online that offer assistance. If you were told that PPI was compulsory, weren’t given full details of the insurance policy, or if PPI was sold to you without your knowledge, then you are eligible for a PPI claim.