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Payment Protection for Credit Card

If you have payment protection cover on your credit card then it is possible your cover was mis-sold and that you may be entitled to make PPI claims for compensation. Payment protection is a type of insurance that is supposed to protect a borrower from financial hardship in the event they are made involuntarily unemployed. The cover is supposed to work by stepping in to take over repayments, but it does not always offer the level of cover customer's expect, can be expensive and has been mis-sold.

Payment Protection for Credit Card: How protected are you?

In 2008 the Competition Commission investigated the rates of payouts for different kinds of insurance including payment protection for credit cards. While some cover, like car insurance, had a high payout rate, the rate for payment protection insurance was very low. Loan insurance payouts were said to be 15% while credit card PPI was just 11%. This means that, potentially, nine out of every ten people who have credit card PPI may be unable to use it.

The cost of Payment Protection for Credit Cards

The cost of credit card PPI can vary quite considerably as it is linked to the customer's outstanding balance. On average the charge is applied at a rate of 79p per £100 outstanding. This means if you have an outstanding balance of £10,000 you may pay in the region of £79.00 per month. This is the equivalent of £948.00 a year.

The mis-selling of Payment Protection for Credit Cards

In 2006 the Financial Services Authority investigated the way payment protection insurance was being sold. It found significant failings and, as a consequence, several lenders were fined. Some of the key failings identified included policies being added without the customer's agreement, policies being sold without full terms and conditions being explained and customer's being sold unsuitable policies they did not need or could not use. As a result of the Financial Service Authority's investigation, public awareness of the issue of mis-selling was raised and the number of people making a PPI reclaim rose dramatically.

If you believe you may have been mis-sold a policy and would like help with your claim, call our team on 0207 471 2000.

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Belmont Thornton Limited is regulated by the Financial Conduct Authority in respect of regulated claims management activities; FRN:838450

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B11, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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