FAQ: Payment Protection Insurance FAQ's
The Payment Protection Insurance Claim Process
Following a complaint which was lodged by the Citizens Advice Bureau in 2006, millions of PPI claims have been lodged in the UK. These claims have seen individuals seek financial compensation for the mis-selling of this product, something which could have cost them sizeable sums of money.
The situation surrounding PPI claims is still ongoing, with many people continuing to pursue their right to claim compensation.
Claims are lodged by individuals who discovered they were mis-sold the product when taking out loans or other forms of credit agreement. This usually relates to financial products which have been obtained over the past ten years, meaning that a large number of people are entitled to claim.
What is Payment Protection Insurance?
The policy provides insurance to customers taking credit agreements and loans – such as mortgages, bank loans, credit cards and store cards. The insurance will cover payments for these products in the event that the borrower falls ill or becomes unemployed.
However, if the borrower was unemployed at the time they obtained the policy, or had a pre-existing medical condition, the insurance would have become void.
This means a number of people were misled – purchasing the insurance when it was not applicable to their situation and some even had PPI added to their loans and other products without their knowledge.
This meant that when initial complaints were lodged in 2006, a number of people experienced outrage at the situation, leading to a high volume of claims being made.
Number of claims
The high volume of complaints is something that has been registered with a number of bodies including bankers, lenders and the Financial Ombudsman Service (FOS) all receiving a large number of complaints.
According to figures, NatWest saw 31% of its complaints relate to PPI policies in 2011, with the Royal Bank of Scotland setting aside £850 million to pay claims, which accounted for 47% of all their complaints. (See links below)
Meanwhile, the FOS said it had received more than 1,040,000 complaints for payment protection insurance during 2010/2011. (See links below)
On top of this figure, estimates for 2012 expect claim numbers to continue to grow as the FOS predicts they will receive 285,000 new cases over the year. (See links below)
Individuals could find themselves eligible for fairly large payments for any mis-sold PPI products they may have bought.
Claiming for mis-sold PPI is an important consideration for any individual who has received a loan or credit agreement of any description over the past ten years.
Claims can be handled either independently or through the use of a specialist service – often referred to as a claims management firm.
Basic information, such as your agreement number, is needed to process a claim. Those unsure about their eligibility can also use management firms to check this for them, establishing whether they have a case to pursue.