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What is PPI?

If you have taken out a loan, mortgage, hire purchase agreement, credit or store card then it is likely you were also offered something called PPI. PPI stands for payment protection insurance and it is a type of cover designed to protect a borrower if they are unable to work, and make debt repayments, due to sickness, accident or redundancy. The cover is controversial, though, and has been the subject of several high-profile investigations.

What is PPI? Why is it so controversial?

PPI first hit the headlines back in 2005 when the Citizens Advice Bureau launched a complaint regarding the cover and the way it was sold. They claimed the insurance was overpriced and often provided very little protection for the customer. They were also critical about the way the cover was sold alleging many lenders used underhanded or high-pressure sales techniques and failed to protect customers from being sold a policy that was not suitable for their needs. As a result of the Citizens Advice complaint, The Office of Fair Trading and The Financial Services Authority investigated the industry. They found severe failings and, as a result, many lenders were given large fines.

What is PPI? How much does the cover cost?

PPI cover can be very expensive and typically costs 13%-25% of the original loan value. In one exceptional case, however; uncovered by the Citizens Advice Bureau, it was discovered a customer had been charged 56% of the original loan value just for the PPI! To put this in context, on a loan of £10,000 this could add an additional £5,600 - plus interest! Even if the policyholder did need to claim financial help from their policy they could never hope to recoup such an amount.

On credit and store cards PPI is usually charged a little differently. Generally charges are applied at approximately £1.50 per month per £100 on any outstanding balance. This may not sound a lot, but if you owe £5,000 on your credit card it could amount to an additional £75 per month - that is £900 a year!

If your lender sold you a Payment protection policy without fully explaining the costs involved, you could make a claim. Just complete the quick claim form at the top of this page.

What is PPI? Why does the cover have so many exemptions?

Most types of insurance have quite a lot of clauses and exemptions, but in the case of PPI many people were not made aware of them. Some examples of ailments and situations typically NOT covered include:

  • Back pain
  • Stress
  • Depression
  • Relationship breakdown
  • Situations where a borrower has to give up work to care for a family member
  • Customers with pre-existing medical conditions
  • Customers over the age of 65
  • Customers who are self-employed.

Unfortunately, many of the people excluded by the last three exemptions were sold a policy regardless. This means they were paying for insurance cover they could never use. If you were not made aware of the exemptions attached to your policy or you were sold a policy that was not suitable for you, you can make a claim. Simply complete the form at the top of the page.

What is PPI? How was it mis-sold?

There were many different ways in which payment protection insurance policies were mis-sold. Below is a list of examples. This list is not exhaustive so if, after reading it, you are still not sure if you could make a claim call our customer care team on 0207 471 2000.

  • Many customers were told, incorrectly, that they had to have the cover.
  • Many customers were pressured into taking out a policy by a salesperson.
  • Many customers were incorrectly led to believe taking out cover would improve their chances of being given the loan or credit.
  • Many customers had PPI added to their loan without their knowledge.

What is PPI? How can I make a claim?

To start your claim today, simply complete the quick claim form at the top of the page. Remember, you can make as many claims as you want and you can even make a claim if your loan is paid off or you no longer use your credit card account.


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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website www.gov.uk/moj/cmr number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit 16, Elysium Gate, 126 New Kings Road, London, SW6 4LZ and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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