How PPI have been Mis-Sold

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By: james
on 1st May,2013

The aim of the policy is to protect the borrower should their circumstances change.

Mis-Sold PPI: How would it have happened?

The idea of payment protection insurance, or PPI, isn't, in itself, a corrupt one. People genuinely choose to opt for this additional policy as an add-on to their loan agreement and, in some cases, it's an ideal protection to have. The aim of the policy is to protect the borrower should their circumstances change. If, for example, you take out a £20,000 loan for some much needed home improvements, but during the repayment term, you are faced with redundancy and the risk of falling into arrears, PPI can be a valuable commodity - ensuring repayments are met until you find new employment.

The problem is that, in many cases, PPI mis selling were apparent, with many lenders using various means to pressure their customers into the policy without the optional back-out clause. Ways in which this happened vary, but include:

Forced Selling

Many lenders, in the past, have refused the approval of a loan or other finance agreement unless the customer took out the PPI as well. This method of selling is against regulations, is an example of poor practice and gives the customer a right to reclaim the PPI that they have paid during the term of their finance.


Lenders have had a nasty habit over the past few years, of not giving the customer enough information about the loan they were taking out. They may have failed to mention that PPI was an optional extra and the checkbox needed to be unchecked, or perhaps they didn't give the customer the option of a cooling off period.


Similar to being misinformed or not informed at all, the assumptive sale of PPI is when the lender may have sold the PPI policy on the assumption that the borrower needed, or wanted it, even if they didn't.


In some cases, the PPI may have been sold to the consumer even though their personal situation should have dictated that it was null and void and useless to even offer it. This would be the issue if the borrower was self employed, unemployed or retired. After all, why would you need PPI to protect your repayments, if you had no job to be made redundant from?

In all cases of mis-sold PPI, the individual has the right to claim it back. Its money that is rightfully theirs and the process couldn't be simpler with the help of a claims management company such as iSmart Solutions UK. Their expertise and experience will mean that the claimant doesn't have to do anything - they just have to wait for the outcome, while the company does the legwork.

Last year, £1.9bn was paid back to successful claimants[1] , with the prediction of a total redress of £13bn, which some insiders believe will be doubled[2]. Banks have been instructed to contact victims of mis-sold PPI by the FSA, with between 4 and 12million letters being written[3]. It goes to show how


serious a scandal it is, and how important it is for individuals who believe they are a victim of the poor.

This guide has been provided by PPI Clams management company iSmart Solutions who help the public claim back thousands from miss sold ppi. They specialise in getting as much of your claim back as possible and handle all the forms and leg work for you.


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