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Capital One PPI

In 2007 Capital One was fined £175,000 for failing to protect customers from the possibility of being mis-sold a payment protection insurance policy that they did not want or need. The FSA found that the lender had not put in place ‘adequate systems and controls’ and had failed to ‘treat customers fairly.’

The FSA’s investigation related to Capital One PPI sales that took place between January 2005 and April 2006. It was thought around 50,000 customers may be affected with the FSA finding the lender had failed to provide adequate policy information or to explain the exclusions of the cover.

As with most other types of PPI and the majority of insurance products, Capital One PPI has a significant number of exclusions. These are things that are not covered by the insurance. In some cases the exclusions are such that a person may be wholly unsuitable for the cover. A good example here is pre-existing medical conditions. Most PPI policies do not cover pre-existing conditions, this means that if you suffered from a medical problem prior to taking out the cover it is unlikely it would be covered by the policy. In some cases, if it is a minor ailment, it is unlikely to be an issue; however, if you suffer from a more significant problem and this worsens, resulting in your having to take time off work, you are unlikely to be covered by your policy.

Capital One PPI is sold on both loans and credit cards. The insurance is charged differently for different types of cover. On loans, PPI is generally added as a lump sum cost. This cost is then added to the initial loan. This will usually result in higher monthly repayments and can result in the repayment period being extended. Loan PPI also attracts interest at the same rate as the base loan and so can prove to be an expensive extra. It is important to take all these considerations into account before deciding whether or not to take out a policy. It is also important to note that the full cost of your Capital One PPI policy should have been carefully explained to you, if it wasn’t you could be eligible to make a claim for mis-selling.

PPI on credit cards is generally charged on a month to month basis. In most cases you will not pay anything if your balance is nil. Most credit card PPI charges are usually applied at a rate of approximately 79p per £100 outstanding. This means if you owe £2,000 on your credit card you may pay around £15.80 per month. This figure will obviously increase or decrease depending on your outstanding balance.

If you think you may have been mis-sold a policy by Capital One or any other lender you have the right to make a complaint. Since The FSA’s initial investigation in 2006, which examined the PPI industry as a whole, in excess of 1.5 million customers have made payment protection insurance claims and millions of pounds have been paid in compensation. To find out more regarding mis-selling or to make a claim call 0207 471 2000.

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