WTF is PPI?

It's Thursday - let's get serious before the weekend hits. I've gone for the big one, a topic currently garnering pace in the media world - P.P.I. 


People keep talking about it, but to quote my dear friends "WTF IS IT?"  Why am I getting all these calls and emails from people trying to talk to me about PPI?
Right – let’s start with the basics.
PPI stands for Payment Protection Insurance – it’s normally taken out as insurance to cover your repayments in case you stop being able to pay. And we’re talking repayments for any sort of finance – not just personal loans, but also credit cards, store cards and car finance. 
Photograph: Guardian
THIS IS SO ANNOYING.

What's the big deal?

The big draaama with PPI recently is that the lender is supposed to tell you a couple of things when you first take it out and, well they haven't - to quote Cilla Black "surprise surprise".. 

Firstly, they should let you know if your loan arrangement includes PPI – and if so, your lender should explain to you how much extra it’s costing you. But in reality, this has not always happened. And that's where the drama starts..



Also – there are so many different types of PPI policies,  even if you knowingly took out insurance, there’s also a chance that you were sold the wrong type of policy and tricked into paying a higher premium for cover you don't need. More drama.


What's this compensation about? I'd quite like some cash.


Sooo – if you’ve started a finance arrangement which, unknown to you, included PPI or an inappropriate level of insurance, you can make a claim against the lender for mis-selling you the policy. And if your claim is successful, you get a refund. The average claim pays out 2 grand! TA DA!
"The amount set aside by banks, building societies and credit card firms is over £12bn"  Top fact courtesy of the BBC.

But who are the people calling me and texting me?? I’m pretty sure I haven’t taken out insurance!


These are claims management companies who offer to get you a PPI refund for a cut of about 20-30%. God, I hate cold callers, I need to get my number out of the phonebook. Unsubscribe to any mailing lists you don't actually need. And ALWAYS click no to sharing your data.
But let's cut to the chase - so you've taken out insurance - but how do you know if it's been mis-sold?  If you can answer no to any of the questions below, you should definitely think about kicking some lender butt!



Even if you haven't taken out PPI, now you know what it is, who's ringing you and what you can do in the future! I.e HANG UP.
 

COOL.

xXXXx


  • If the insurance was optional, was it made clear to you? 
  • Single premium PPI insurance normally only lasts for 5 years. If your loan/ finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan?
  • Did the adviser try to persuade you to take it out by saying something like 'we strongly recommend that you consider taking out PPI'? Anything like this which is clearly just an over-sell counts as an 'advised' sale. They should have explained demands and needs to evidence why this policy is suitable for you. If they didn't, this is grounds for complaint and a nice little bit of compensation..
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