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Archive for tag: PPI Issues

The 4 Main Issues with PPI

Knowing what the problems were with the most mis-sold product in banking history, means that you have a stronger case when it comes to claiming payment protection insurance (PPI) compensation.

There were many problems with PPI…

Four

1. PPI was expensive

The more an insurance policy covers, the more expensive it tends to be. PPI offers very little cover but was incredibly expensive.

The problem was, people were not made aware of their consumer rights and so were not told they could shop around. This meant that people bought a poor-vale-for-money product when they could have got a much better insurance policy, for a lot less.

2. PPI was ineffective

What many customers did not realise at the time they were sold the policy, was that PPI was structured in a way that made it very difficult and complex to make a claim.

With an insurance policy, you would hope that in the event of a claim, they would react quickly. In most cases, insurers do but in the case of PPI, making a claim was complicated.

If you claim was successful - and this was unlikely - it took several months for the policy to kick into action. This in itself is deemed as unacceptable.

3. PPI was mis-sold

Many customers were given the impression PPI was essential and compulsory.

A bank or lender can insist that a customer protects their investment or loan with some kind of insurance policy. But they cannot insist that it is their product and their product alone.

You can shop around and compare policies, probably like you do with energy prices, car insurance, home insurance and so on.

4. PPI was 'inefficient'

The payout rate on PPI policies was 15%. On car insurance, over 85% of claims are successful - you can see the discrepancy between the pay-out rates.

The sad fact is, many people thought they had done the right thing and that they were protecting their debt against a loss of income. When they became too ill to work, they turned to PPI to cover their repayments. At a time when they were vulnerable, the policy did not pay out.

This simply added to their stress and worries, a situation that was wholly unacceptable.

The time has come to claim your money back

If you have a PPI policy, the chances that it was mis-sold to you are high. You could claim all your premium payments back, as well as interest and any costs or fees that were incurred on your account because of PPI being added to it.

Payment Protection Scotland can help on a no win, no fee basis.