People who borrow money via a mortgage, car, loan or other means are often told they need PPI (Payment Protection Insurance). This is supposed to pay their monthly payment should they become ill, unemployed or under some other circumstances cannot meet their obligation. It is a common practice with banks, credit card companies, auto companies and others. Faults have been found with this insurance which has resulted in many ppi claims.

Investigations have revealed that many times when a person signed for a loan, mortgage or other financial transaction the PPI was added on without their knowledge. In other cases, they were told that it was necessary to secure the loan. When it was added to the original amount, the person wound up paying interest on the insurance as well as the loan.

People trying to file claims on this insurance have found that there were circumstances of which they were unaware that would not allow them to do so. The PPI documents have very fine print at the bottom which many people do not read. It contains a list of circumstances under which the payer cannot file which is almost everything that would normally occur.

Mis-sold PPI’s are very common. This means that the plan is sold without a full explanation to the borrower of its costs as well as details of what it covers. Lenders who perform this misleading action feel it is a way to make a lot of extra money without any risk. Many borrowers are completely unaware of what is being done to cost them extra money.

As people have found that the insurance is worthless they have made complaints to government officials. As a result, in the United States, the Financial Services Authority is conducting a full investigation of lenders and others who have been issuing the PPIs. Some furniture and other sellers have joined the fray by offering “unemployment Insurance” which is another form of PPI. That is also completely useless.

Many banks have been found guilty of this practice with such things as loans or credit cards, even telling the customer that it is compulsory. It is extremely overpriced and provides a huge profit to the lender as this insurance comes at a very high rate and often becomes a large part of the initial loan. When the cost of the PPI is added to the loan payment the borrower winds up paying interest on the insurance as well as the loan.

A published estimate of the number of people making a claim on this insurance is only 4% of those with the coverage. To add insult to injury most of this small percentage of claims was rejected. The fine print on the document is seldom read in full by the borrower and they are unaware that the policy is worthless in almost all the circumstances it is supposed to cover.

The companies providing PPI know that it is a high profit addition to their loans or sales. They are well aware that the majority of borrowers will never file and, if they do, that almost all ppi claims will be rejected. Many people are going to court and suing companies who have engaged in this practice.

Learn more about PPI Claims. Visit www.PPIRefundsUK.co.uk where you can find out all about how to make PPI compensation claims and start to get your cash back.

categories: personal finance, insurance, loans, ppi claims, ppi claim, ppi compensation, mis-sold ppi, mis sold ppi