The Tarnished Reputation of PPI

In 2009 - 2010, it is believed that circa 135 people on average were filing official complaints on a daily basis with regards to their payment protection policies. Although PPI can be a helpful policy for vulnerable individuals, especially in a time of financial uncertainty, it has gained an undesirable reputation as a result of the numerous claims of mis-selling.

Payment Protection Insurance is sold to a consumer at the point at which they are acquiring a loan, mortgage, credit or store card, or perhaps paying for something on credit. The alleged guarantee is that it will cover your payments should you lose your job, become unwell, or have an accident. However, in recent years it is estimated that around 2 million people have been miss-sold PPI according to Which?.

A report compiled by the FOS reveals that PPI has been the most problematic financial issue of 2009-2010, making up almost one third of all complaints made to the financial service ombudsman, whilst The Guardian newspaper revealed that the FOS had dealt with approximately 166,000 disputes relating to PPI.

The Competition Commission has suggested that the sale of PPI at the same time as loans and mortgages be restricted. This would allow consumers the option to decide whether this insurance is right for them, and also allows them time to shop around for a better deal on PPI should they decide to go ahead with it.

Barclays however, have opposed these suggestions, stating that the proposed ban on selling PPI at the point of credit sale would restrict the customer's option rather than improve them. The customer would be left unprotected in Barclays opinion.

If you are unsure whether you have been mis-sold Payment Protection Insurance, the best course of action to follow would be to check all the paperwork you were sent at the time of taking out a loan, mortgage or credit card. If after this you are still uncertain, it would be a good idea to contact the insurance provider and discuss the matter further with them.