How do you know if you have been Mis sold PPI
PPI stands for payment protection insurance. Essentially, it is an insurance product sold to customers who get credit from banks to protect repayments in the event of sickness, disability, death, unemployment or some other event which renders them unable to work. PPI policies typically pay out when such an event happens and the insurance is paid to the bank who provided the loan to make the loan repayments that the customer cannot pay for a set period of time, which is usually about 12 months.
There has been much controversy surrounding PPI for the last 6 years because it was then that it was discovered that many banks had been mis selling PPI to unsuspecting customers in order to make money. Mis selling PPI involves selling PPI which is not relevant to the customer as it would never pay out. This is an unethical practice and if it has happened to you, you are likely to be eligible for compensation. The High Court recently ruled against the banks meaning they have had to put aside £10 billion of potential compensation for loan and credit card customers. The banks were also instructed to write to customers who may be eligible even if they did not apply for the compensation.
How do you know if you are eligible?
Firstly, the banks have been instructed to inform all of their customers who may be eligible by letter, so it is likely that if you are eligible, you may have already been contacted by your bank. It is important to know that not all customers will be contacted and this process could take some time. It is important to act now, so look over all of your loan documents and check to see if you did have PPI. If so, think back to when you first got the loan and ask yourself:
Were you told that PPI was compulsory? It is always optional.
Were you a student, pensioner or self employed at the time when you got the loan?
Check all loan contracts to see if the cost of PPI was embedded without your knowledge.