What Is Payment Protection Insurance (ppi) & How Is It Mis-sold?

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Payment Protection Insurance will cover the payments on a loan if the borrower is unable to work for a period of time

. This sounds reasonable and prudent. The reality is that missold ppi adds an unnecessary cost to the loan and does not benefit the buyer. Too many loopholes are built into the plan.

A much better option is for the consumer to purchase unemployment, accident and illness insurance. Since the insurance pay-outs do not attract income tax, covering 50% of the buyer's income is adequate. This will keep up payments until the insured is able to return to work. This type of insurance covers mortgage, rent, and other monthly payments instead of just a single loan. In addition, income protection insurance pays out for decades instead of just a few months.

PPI benefits the lender, not the consumer. Fully 85% of these payment protection insurance claims never pay out. The consumer must submit ppi claims within a certain time frame after the triggering event and then wait 3-6 months for the policy to become active. All the while the consumer must continue to make full and timely payments on the loan. Even if he or she finally qualifies for payments, the loan may have already defaulted.

Despite the fact that PPI claims seldom pay out, the large banks have continued to sell payment protection cover since 1974. Either when the loan is purchased or sometime thereafter, the buyer is convinced to take out the insurance. Some missold PPI was not even disclosed to the buyer, but incorporated into the loan without being mentioned. At other times, the borrower was told the loan would not be approved without PPI insurance.

Payment protection claims go unpaid due to exclusions that are hidden in the language of the policy. Sometimes the borrower was ineligible for pay-outs because he had reached retirement age, was unemployed or worked part time, was a full-time student, or had a pre-existing medical condition.

Consumers who feel they are eligible to receive payment protection claims or PPI reclaims may visit www.guardianppiclaims.co.uk and www.ppiexpert.co.uk. These services have an enviable record of 94% success in regaining the customer's money.

The Financial Services Authority has ordered that HSBC PPI, RBS PPI, Lloyds PPI, and First Plus PPI customers must be notified of their right to a PPI reclaim. HSBC PPI has a relatively small liability of about 270m pounds, while Lloyds PPI carries 1bn pounds at Barclays and 850m pounds at RBS PPI.

For payment protection insurance claims against one of the aforementioned banks or First Plus PPI, go to www.guardianppiclaims.co.uk or www.ppiexpert.co.uk without delay. Lodge a complaint and start action to obtain a PPI reclaim. This is the day to take action.

by: ppi

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