When credit consumers take out a new financial service such as credit
, a loan or new mortgage they are also offered Payment Protection Insurance which protects them if they experience difficulties in paying for the loan by means of unemployment, injury etc.
Banks aren't obliged to offer this service but if they do they are required to ensure they understand the background of the customer and are certain the PPI would cover them in the unforeseen.
Banks can exploit PPI in a few ways and the most common is simply allowing the customer to select PPI, simply by ticking a box and this releases the bank from the responsibility to correctly sell a customer the right product. If that customer happens to be unlucky enough to need the PPI, the chances are they will not be eligible for the product they have paid for.
The consumer would then remain unaware that they are completely ineligible for the product and if they did find themselves unable to make repayments they would not be provided with any insurance. Many thousands of customers have fallen on hard times only to find out there is no back up plan to pay their mortgage even though they thought they had planned ahead.
If that wasn't sneaky enough the Banks can exploit loopholes allowing them to tag PPI on to a financial service without even telling the customer, they may not notice and will not likely need to claim. Even if the customer finds them self unable to pay their loan, the bank will not advise them to use their PPI unless prompted.
This course of action is a grey legal area but with the choice of the right solicitor it is more than possible to claim back all of your lost payments on PPI if you didn't explicitly choose to buy it.