Payment Protection Credit Cards
In recent years, payment protection insurance claims
have increased significantly as more and more consumers realise they were sold a
policy they did not want, did not need or could not use. It is estimated that
there are around 20 million active payment protection policies in the UK and it
is not known how many of these might have been mis-sold, but the number may be
Payment Protection Credit Cards Cover
Payment protection on credit cards is applied differently to how it is applied to
loans. As a general rule, loan PPI is applied as a lump sum when the loan is
taken out, but credit card PPI is applied on a monthly basis and directly
relates to the outstanding balance.
The cost of Payment Protection Credit Cards Cover
Credit card PPI usually costs approximately 79p for every Â£100 outstanding on the
balance. This means that if you do not owe anything on your card there will be
no charge, but if, for example, you owe Â£5,000 your monthly charge is likely to
be around Â£39.50 - that's the equivilent of Â£474.00 a year.
The low payment out rates for Payment Protection Credit Cards Cover
In 2008, the Compensation Commission the payout rates for different forms of
insurance. Their investigation revealed, shockingly, that only 11% of people who
tried to use their credit card payment protection policy received a pay out.
This figure suggests that almost nine in every ten credit card PPI policyholders
are paying for a policy they will not be able to use.
Part of the reason why the number of claim rejections is so high for credit card
PPI is because a significant number of policies have been mis-sold to customers
who were unsuitable for the cover. A person may be unsuitable for PPI for a
number of different reasons including if they are over the age of sixty-five,
have a pre-existing medical condition or are unemployed, self-employed, retired
or in full times education. If any of these situations apply to you then you may
well be entitled to payment protection refunds.
Your policy may also be considered to be mis-sold if your lender failed to give
you full information regarding the cover, gave you incorrect or misleading
information or if the salesperson pressured you into taking out the policy.
The amount of compensation you may be entitled to receive depends on how long you
have held the policy and the size of your monthly payments, but you can still
make a complaint even if you have already paid off your credit card. To find out
more about payment protection credit cards cover or making a claim call 0207 471 2000.
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