Avoiding PPI Mis-selling
The controversy surrounding Payment Protection Insurance or PPI mis-selling has accrued a huge amount of interest in the past few years, mostly from people who have been unaware for so long of their rights as borrowers. Mis-sold loan and credit insurance can increase your debt by a substantial amount, specifically in cases where premiums incur interest rates which are kept from borrowers at the onset. A number of institutions have recently been reprimanded for payment insurance mis-selling and several more are being warned. As such, the knowledge on what mis-sold PPI's are about and how to spot them immediately is proving to be important now more than ever.
A commission rate is granted to lenders and credit card companies for every type of PPI that is sold. It then comes as no surprise how each credit card or loan application is considered as additional opportunities for them to earn even more. While there may be advantages to having an insurance policy, the disadvantages may also be too burdensome, dissuading borrowers to actually purchase them. As a result, certain lending companies have resorted to foregoing any discourse on the specifics of PPI's, passing them off in ways wherein a borrower can be led to assume its inherent role in receiving any type of financial assistance.
Protect yourself from mis-sold insurance by, first, having the confidence to inquire about every aspect of a policy that is being sold to you. A lender should be able to explain if there are limitations on coverage as regards age or pre-existing medical conditions that will render a borrower ineligible to file for a PPI claim later on. If a loan insurance policy offers coverage for a period shorter than the time it will take you to complete repayments, signing up may be a total waste of money. Self-employed, retired or unemployed individuals will not be permitted to file PPI claims and therefore should not be sold insurance in the first place. Any application for a loan or credit card cannot be denied on account of a borrower declining to purchase a PPI or opting to use a third party insurance provider.
PPI's were intended to provide relief for borrowers but over the years, they have proven to cause more harm than good. If you feel as though you may have fallen victim to insurance mis-selling, go ahead and check with a debt counselor or an advisor on mis-sold insurance claims who can help shed more light about your situation. Verify if you have a strong case before pushing through with a formal complaint.
