Payment Protection | Payment Protection Insurance Scandal

Payment Protection Insurance Scandal

Billions of pounds may find their way back to consumers because of the bank charges that were inflicted. Fourteen million individuals were sold loan insurance, but they could be in the market for a refund. The insurance companies are set to give back about 3.85 billion pounds in refunds. The whole thing started when people were tricked into getting overpriced insurance coverage in case a payment would be missed. The loan, credit card, and mortgage industry is responsible for such things.

The insurance is not really needed, but some didn’t even know they were being charged. A lot of residents don’t even know that they can get the money back. An announcement by the Financial Services Authority in the past few months has told customers they can seek refunds for the payment protection insurance.

There were seven million payment protection insurance policies sold last year and since the programme began. Most of the individuals who received such things were taking out loans, mortgages and credit cards. 70 percent that has the payment protection insurance were miss sold. This has made for a lot of anger. In fact one out of four of the policies will ever payout.

How it works is the company offers you the payment protection insurance and says they will send the agreement in the mail for you to sign up and return. However, while you are on the phone they actually sign you up even though you tell them not to in most cases. Just by listening and saying “okay send the information, but don’t sign me up” can get you signed up. I and many others have experienced such underhanded techniques. The insurance is supposed to cover you if there is an accident, illness, or other issue. It doesn’t cover the self employed, students or housewives, even though they try to charge those individuals as well. The policy can also be misrepresented in the fact that it does not cover loss of job when fired or illness such as stress or back pain.

In an example a person took out a car loan for 4,700 pounds, but was charged 5,612 for the debt to be covered. The interest rate plus the protection was extreme and this person thinks a refund is warranted. There are more and more of these individuals out there.

To get you money back there are a few things you can do. First you can claim miss selling if you were never informed of the cover, if it was not explained, or if they signed you up after the explanation despite your decree not to have it.

You can write the company that sold the policy to get the cost plus any interest back. You may even claim loss of payouts if you were turned down for a product you should never have been sold.

Lastly the first must reply in eight weeks, if they do not you can talk with the Financial Ombudsman to file a small claim in court. By doing this you can get your money back.

Back To Financial News May 2008

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