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Beware of Mis-sold PPI

Posted July 2nd, 2010 by Spike

Instances of Payment Protection Insurance (PPI) mis-selling has grown widely over the years, greatly due to the lack of general awareness by most borrowers about the issue. What people failed to realize was how they have been kept in the dark about the negative effects of mis-sold credit and loan insurance policies have on debt, especially with how additional interest rates are computed on top of loan repayment dues. There have been numerous reprimands for several institutions which have been found guilty of payment insurance mis-selling and several more are being looked into. As such, the knowledge on what mis-sold PPI’s are about and how to identify them immediately is proving to be important now more than ever.

A commission rate is granted to lenders and credit card companies for every type of PPI that is sold. This is why they take every application for loans or credit cards as a chance to achieve more income. Although insurance policies can be advantageous in some respect, the prospective downside can also be too much of a burden that borrowers are prone to shy away from purchasing one. As a result, certain lending companies have resorted to foregoing any discussion on the specifics of PPI’s, passing them off in ways wherein a borrower can be led to assume its inherent role in receiving any type of financial assistance.

Protect yourself from mis-sold insurance by, first, having the confidence to inquire about every aspect of a policy that is being sold to you. A lender should be willing to explain if there are limitations on coverage as regards age or pre-existing medical conditions that will render a borrower ineligible to file for a PPI claim later on. If a loan insurance policy offers coverage for a period shorter than the time it will take you to complete repayments, signing up may be a complete waste of money. A PPI claim will not be allowed for self-employed, retired, and unemployed borrowers which is why insurance should never be sold to them to begin with. Any application for a loan or credit card cannot be denied on account of a borrower declining to purchase a PPI or choosing to use a third party insurance provider.

PPI’s were intended to provide relief for borrowers but over the years, they have proven to be of more harm than good. Feel free to consult with a credible debt counselor or debt advisor on mis-sold insurance claims if you believe that you have experiences pertinent to insurance mis-selling and have been victimized by it as well. It is extremely recommended to have your case rendered valid prior to actually going through the process of filing formal complaints.

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