Many people have heard about Payment Protection Insurance being sold on mortgages, personal loans and credit cards, but did you realise you may also have been mis-sold the cover on a hire purchase agreement or another type of loan agreement?
If you have purchased a new sofa, kitchen, bathroom or windows using a finance agreement in the last decade it is very likely that the salesperson offered you some form of payment protection insurance. Payment Protection covers you if you are unable to keep up your debt repayments due to accident, sickness or involuntary unemployment. The insurance can be expensive, though, and customers can often find cheaper or more comprehensive cover elsewhere.
Zenith Windows is one of many companies who offered finance agreements with payment protection policies attached. Many people took out the insurance feeling it would provide a safety net against financial hardship should they be unable to keep up debt repayments. The trouble is that this type of insurance is costly, has a high number of exemptions and exclusions and has been extensively mis-sold.
The cost of Payment protection is typically around 13% to 25% of the base loan value. So, for example, if you bought some Zenith Windows costing a total of £6,500 you may pay between £845.00 - £1625.00 extra for PPI. The PPI cost would also be considered additional borrowing so you are likely to be charged interest on the cost as well.
Your lender should have taken the time to fully explain the cost of your policy to you. If this did not happen you may be entitled to make a claim.
Although each Payment Protection policy has its own set of exemptions there are some that are common to most policies. A good example of this is pre-existing medical conditions. Most policies do not cover pre-existing medical conditions. This means if you had a pre-existing condition, it worsened and you needed to take time off work it is unlikely you would be covered. Another common exemption is people over the age of 65. Because people over this age are considered to be a higher risk they are often not covered by Payment protection insurance.
If you believe you were sold a policy unsuitable for your needs by Zenith Windows you may be entitled to make a claim.
As well as not covering certain personal circumstances most PPI policies also do not cover many eventualities that may lead to involuntary employment. Some common examples here include: back pain, stress and depression. If you suffer from one of these conditions and have to take time off work it is unlikely that you would be covered by your payment protection policy.
Before you purchased your PPI policy your lender should have carefully explained the conditions of the cover. If your Zenith Windows, or any other lender, failed to provide this information to you, you could be entitled to make a complaint.
Other common types of mis-selling include customers being sold cover they could never use. A good example of this is customers who were unemployed, retired or in full times education. PPI is designed to cover a policyholder if they are temporarily unable to work. If the customer was not in employment when they took out the cover they clearly had no need for it. Another common example is people who had existing cover in place or were entitled to full sick pay from their employers.
Before selling you your policy your lender should have evaluated your circumstances and your suitability for the cover. If you feel you were sold a policy that was not suitable for your needs you have the right to make a complaint.
Another popular method of mis-selling concerns the actual way in which your policy was sold. Because of high rates of commission offered to salespeople, some sales staff used high-pressure sales techniques and unfair practices. This could include making a policyholder feel intimidated or forced to buy the cover. In other cases customers were giving misleading information – for example they were incorrectly told they had to have cover or it would improve their chance of being given the loan.
If you are interested in making a payment protection claim or you would just like more information on PPI claims call our team on 0207 471 2000.