PPI expert reveals what constitutes a mis-sale
There is a lot in the news regarding Payment Protection Insurance (PPI) and the way in which it has been missold. Now that the Financial Services Authority (FSA) has ordered banks to contact consumers over missold PPI, more people than ever are likely to be hearing about the scandal in their daily lives. Now, David Cresswell of the Financial Ombudsman Service (FOS) has revealed what constitutes a mis-sale.
PPI was developed as a way for customers to protect themselves if they lost their job or became sick and were unable to meet payment commitments. In such a case, insurers would pay mortgage or loan costs, helping unemployed or ill individuals to avoid financial ruin. However, over the past decade, much of this insurance has been wrongly sold.
In some cases people did not even realise they had been sold insurance Mr Cresswell said. Looking at bank statements could reveal the extra expenditure, allowing individuals to place a claim. In a large majority of cases, insurance was sold when those who bought it would not be able to use the cover. For example, those in the armed forces are covered by their employee for financial commitments, whilst other policies were sold to people who were self employed but stated in their clauses that cover was not extended for those who worked for themselves. In other cases, individuals already had insurance elsewhere and the new policy doubled up on the cover that was already held.
For anyone with such PPI issues, there is reason for a claim. Moreover, with claim amounts averaging £2,700, making a claim could be very beneficial.