Reclaim Loan Protection Charges
Interest rates are already high enough on loans without the added onus of paying for loan protection insurance as well. Unfortunately, unless you were mis sold payment protection cover there is no way to reclaim loan protection charges short of a legal battle. Whilst the courts have ruled that mis sold PPI can be filed against to claim back PPI, if it was sold honestly and ethically the borrower needs to bear the burden.
Legal vs. Mis Sold PPI
This is where the problem truly lies when trying to figure out if there is a claim against your lender. Before you attempt to file a claim against mis sold loan protection insurance, it is important to establish whether or not your lender is guilty of any wrongdoing. Were you mis sold this cover or did you agree to it willingly, even after having the policy details disclosed to you? Although it doesn't sound logical that a person in charge of all his or her faculties would commit to spending so much money on an insurance product that provides few or no benefits, stranger things have happened. The bottom line here is that PPI can be declared 'mis sold' and you can set about to reclaim loan protection charges if this is the case.
Norwegian Salmon Allegory
A good way to look at the difference between legal and mis sold PPI is in the example of a customer who goes to a restaurant and orders Norwegian salmon. The waiter says it is served with a hot pepper sauce which is often too spicy for most people's palette. The customer orders it, the food is too spicy but he eats it anyway. Upon being presented with the bill he complains that it was too spicy and refuses to pay even after having eaten the dish. At this point the police are brought in because the customer ate all the food. He pays begrudgingly, but he pays. On the other hand, the customer at the next table orders another dish that was clearly spoiled and refuses to pay. The restaurateur humble apologizes and offers that client anything on the menu, free of charge. He has been compensated for his troubles.
A Matter of Perspective
The first customer clearly understood what he was buying because the waiter disclosed pertinent fact regarding the dish. On the other hand, the second customer ordered what should have been fresh catch of the day but was quite clearly old and spoiled. This is how you can look at the borrower wanting to reclaim loan protection charges. In fact, claiming back bank charges is legally possible if the lender was at fault. But if the borrower simply decides that it was too expensive after the fact that is not grounds to reclaim loan protection charges. It is all dependent upon how the lender sold, or mis sold as the case may be, loan insurance to the borrower. To reclaim loan insurance charges the lender (seller) must be guilty of mis selling the product. It is as simple as that.
If you are looking to reclaim loan insurance charges make sure you have a case for mis sold cover against your lender before submitting a PPI claim. All else may be disregarded and treated as frivolous.
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