A National Scandal: Payment Protection Insurance
There is a category of insurance that you may be paying for and not even know that you are. Kind of makes it hard to file a claim. Oh, you say, I know about all insurance policies I hold. Do you? Do you know that Payment Protection Insurance, under a variety of names, is included in the vast majority of loan, mortgage, financing (car loans, major appliances, and etcetera), overdraft and line of credit contracts? If not, this is your chance to learn a bit about Payment or Credit Protection Insurance.
Payment Protection Insurance, which is what this product is called when sold by banks and finance companies, or Credit Protection Insurance when it is sold by credit card companies, are supposed to make your payments for you if you become unable to make your payments due to such things as job loss, injury or sickness. The payments part of your monthly payments.
If not part of your monthly payments, it does not mean you have not bought this insurance product: it likely means you paid for the entire policy, known as a Single Pay Policy, up front and had the cost added to your loan. That means you did not just buy it: it means you borrowed the money to do so and are paying interest besides. It is a legal requirement under the consumer protection regulations governing the insurance industry in the United States that those who sell insurance inform consumers of the parameters of all insurance products at the point of sale.
These and other problems with Payment Protection Insurance came to light when a U. S. Regulatory body, the Financial Service Authority, noticed that the number of complaints of rejected claims for PPI, or CPI or Repayment Insurance or whatever the product is sold as, were much in excess of the rejection rate average for other categories of insurance products. The FSA undertook an investigation and it was the FSA, not some consumer protection group, which determined that PPI and CPI were being misrepresented and mis-sold by the firms that make the loans.
A pattern was discovered in how the mis-selling takes place. To begin with, insurers pay out a commission to banks and finance companies and mortgage brokers and car financers when they sell a policy as part of a loan agreement.
It is not that there is anything inherently wrong with a lender wanting you to buy insurance on the debt. But there is definitely something wrong when the commission the lender makes on the sale of the insurance policy is greater than what the lender makes on the loan alone.
The way the payment protection insurance selling process has evolved has been a perfect example of why two unrelated types of consumer products should not be linked in one financial transaction. Imagine if car dealers sold car insurance as a mandatory element in their transactions.
In some instances banks, finance companies and other lenders were found to be adding PPI policies as an administrative cost. In these cases the borrower signs the policy as part of the many pages of documents proffered by the lender for the borrower to initial before receiving their check.
Other tactics are also widely employed in mis-selling PPI. One tactic that borders on criminal extortion is telling the consumer that the protection is mandatory when it is not. Another is including the policy without even informing the customer that they have it.
Looking to get your cash back from mis-sold-ppi? Then visit www.PPIClaimsUK.co.uk to start your PPI claim today.
Related posts:
- Tips On Paying And Reducing Monthly Mortgage Payment The monthly mortgage payment is one of the most expensive...
- Term Life Insurance or Whole of Life Insurance Policy? When buying life insurance its vital you get the right...
- Getting Product Liability Insurance Insurances are vital to protect us from any damages or...
- Make Sound Decisions With Your Insurance Purchase It is particularly important to many building owners in this...
- The PPI Con Borrowers should be covered for their debt repayments if they...
Related posts brought to you by Yet Another Related Posts Plugin.