It’s likely you’ve seen the adverts, taken cold calls, read money blogs or received emails about PPI, and the dangers of not claiming compensation if you’ve been mis-sold it. PPI is a contentious issue and can be difficult to decipher amongst the legal jargon that many companies are using.
What is PPI?
PPI, or Payment Protection Insurance, is a form of insurance sold by loan companies in order to protect your money from any internal or external meddling. This was applied to any kind of loan taken out by an individual against a property, whether that be a long-term mortgage, or a short credit loan offered by payday lenders. To protect customers’ personal finance, the insurance was designed to ensure that consumers could still make their loan payments, even if their income circumstances changed. For example, the insurance made sure that if a consumer was ill or was made redundant, they could still afford their loan payments.
Why are people worried about PPI?
The reason that PPI is so significant is that a huge number of customers were mis-sold PPI policies that they were ineligible for, meaning they had no protection over the repayment of their loans. Often, the same customers were being sold policies that they knew very little about, and so were unaware of the small print that disadvantaged them against the lending companies. PPI was often bundled into the contracts needed to take out a loan or a credit card, so few people were aware that they had the policy- whether they needed it or not.
How do I check if I have PPI?
A lot of customers with existing loans don’t know if they have PPI cover as a part of their package, but there are some easy ways to check. Anyone who sold you a loan should have discussed a ‘cover’ or policies concerning repayments during meetings, and there is a high chance that this means you have some kind of PPI policy. Alternatively, you can check the initial paperwork you were given, where there should be details about the cover you’re receiving. If there is no information, call your bank or credit provider to inquire as to whether you have a PPI policy on your loans.
Though the jury is still out on whether PPI is a good or bad thing, it does provide customers with the protection they need when it comes to repaying loans. But, it’s best to check you’re not at a disadvantage by having it than not having it at all.
Written by Niamh Dunne
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