PPI Claims – What are they?

This is a guest article from Sarah Jennings

In the UK, there is much of talk of PPI claims, with a surge in claimants who believe that lenders and credit providers owe them money back.

But why are people making Payment protection insurance (PPI) claims and what is PPI in the first place?

PPI is Payment Protection Insurance and is sold as an optional extra alongside financial products such as loans, store cards and credit cards. The idea of PPI is that if you are made redundant, have an accident or become sick, for example and cannot work, your payments on that particular financial product will be covered. This is a pretty good idea, you would think. And yes, it is. But only if you know what you are buying into.

PPI claims are taking place frequently in the UK because of a relatively recent discovery and investigation that found millions of people were being miss sold PPI. Some did not realize they even had PPI, others had not been informed that it was optional and in some of the worst cases, the consumers would never have been eligible to claim on the PPI anyway. The reason is that most PPI policies do not cover an individual who is self employed, retired or unemployed. Yet people who fit into those categories have been sold these policies alongside their loans and cards. Because selling these policies without making consumers fully aware of them and their terms is illegal, consumers have been claiming back PPI payments made over the last 6 years. For some this might only be a small amount, but for others it is thousands.

There are an estimated 20 million PPI policies in the UK, worth an estimated £5 billion per year to the insurance industry.

This is a guest article written by Sarah Jennings

Picture by: Jayel Aheram