Reclaiming PPI Compensation faqs

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What is PPI?

PPI (Payment Protection Insurance) is insurance to cover your payments on a loan should you become sick, unemployed or suffer an accident.

What sort of loans are covered by PPI?

Car finance, mortgages, bank and building society loans and credit cards are all products that frequently come with PPI attached.

Is PPI compulsory?

No. PPI is not compulsory though some lenders, especially on larger loans do insist that it is taken out. However, lenders are under an obligation to inform you of your right to shop around to find the cheapest cover. You do not have to buy PPI from your lender.

My lender told me I had to take out PPI to have my loan approved. Is this correct?

No. You have been mis-sold your policy as your loan application is not dependant on taking out PPI.

I am self-employed, will I be covered?

It is highly unlikely that you will be covered as most self-employed people are excluded from PPI and your policy is likely to be void.

I have a pre-existing medical problem. Will I be covered in the event of my illness returning?

In most cases it is unlikely that you will be covered. Your lender or the insurance company providing the cover should have checked with you first what medical conditions you had at the time the policy was taken out. If they didn't, it is probable that they will not meet your payments if you fall ill.

I was not informed PPI would be part of my loan, do I have a claim?

Yes, it is not uncommon for lenders to add in PPI without explaining that they have done so. You have been mis-sold your policy and should make a claim.

Why was I sold PPI when the chances of making a claim are so small?

The main reason for the mis-selling of PPI is due to the massive profits and commissions made on the policy. It is estimated that there are 20 million policies active in the UK, most of which are vastly overpriced and do not meet the needs of the people they were sold to.

There are massive cash incentives and pressure on those who sell the policies to ensure as much money is made as possible. The FSA have already fined companies to the tune of £1.6 million and more fines are expected. The Citizens Advice Bureau have labelled PPI a "protection racket".

If you have PPI make a claim today by contacting Avalon Solicitors on 0800 050 1222.