Big Banks to Axe Payment Protection Insurance (PPI)?
Payment Protection Insurance’s (PPI) function is to provide financial assistance to borrowers which are unable to keep up with repayments on their financial commitments as a result of redundancy, ill health or perhaps an accident. PPI can cover various different product types, such as mortgage, personal loan, car finance or credit card. Banks and other financial institutes have been fined by the Financial Services Authority (FSA) for treating customers unfairly when mis-selling Payment Protection Insurance (PPI). The sale of PPI has been highly lucrative for banks and retailers alike, generating commission ranging from 25-75% of the total policy – resulting in huge profits.
Highlighted below is a list of some of the fines the banks and finance companies have incurred:
- Alliance& Leicester ~ £7,000,000
- Capital One ~ £175,000
- Egg Bank was ~ £721,000
- GE Capital Bank ~ £610,000
- HFC Bank ~ £1,085,000
- Liverpool Victoria ~ £840,000
- Loans.co.uk ~ £455,000
Mis-sold PPI can be when a borrower is deliberately mislead into believing that the policy is a compulsory part of their finance agreement. PPI was often added to the initial loan amount, meaning that it incurred additional interest. As such PPI can no longer be sold with 14 days of taking out a new finance agreement.
An alternative you may wish to consider is Mortgage Payment Protection Insurance (MPPI), this covers your mortgage if you are unfortunate enough to be made redundant. During these increasingly difficult financial times it is advisable to protect your largest asset – your property. The Council of Mortgage Lenders is now encouraging all mortgage borrowers to evaluate the benefits of taking out MPPI instead of PPI.
Have you been mis-sold PPI or a mortgage? If so, Cloud 9 Claims can help you.
