PPI Frequent Q & A's
The salesperson told me that I had to take out a PPI policy as well as my loan. Is this really true?
Taking Payment Protection Insurance is nearly always optional but as PPI can be so profitable to companies and as some give large incentives to staff who sell it with the loan that it can often be portrayed as compulsory.
Although companies that do make it compulsory are not actually technically breaking any specific rules they may be in contravention of the Financial Service Authority (FSA) ‘treating customers fairly’ or the ‘acting in a fair and reasonable manner’ rules. The UK banking code (to which most banks adhere) says that banks should not make customers take their policies.
In some exceptional circumstances, particularly where the loan amount is large, the company will insist on some form of protection to cover payments should you be unable to work. They still should not make it compulsory to take their PPI and in these circumstances they should check whether you have any other income protection in place. If you need to take out a separate PPI policy then it is often much cheaper to buy it from an independent PPI insurer. The lender should then accept this cover to meet their requirements.
I have Credit Cards and Store Cards which have a monthly PPI charge added. I don’t recall asking for this product when I took out the card.
When applications for these cards are completed the PPI application is simply a tick box ‘yes’ or ‘no’. Although the person completing the application should go through what it is, what it covers, the cost and ascertain if your personal circumstances make you eligible for cover this is not always the case. Common questions such as ‘do you want to protect your repayments in case you are unable to work’ are all that are asked. If you answer is yes the box will be ticked and you will move on. Another common ‘trap’ some companies use is to include it automatically and it is up to you to read the small print and ‘opt out’. This method normally falls outside the Financial Service Authority (FSA) ‘treating customers fairly’ or the ‘acting in a fair and reasonable manner’ rules.
I was retired, unemployed or self-employed when I was sold my PPI. Do I need it?
In the case of being retired or unemployed or only work 16 hours per week the answer is NO. PPI is designed to replace income if you do not have income at the start any claim on the policy will be rejected. Asking questions to ascertain that you are working at least 16 per week should be part of the sales process. If it was not or if you were still sold PPI even after this was ascertained you were probably mis-sold.
Self employment is more difficult. Some policies do provide some element of cover but restrictions will apply. Often it will only cover not being able to work due to illness, injury or critical illness as opposed to when there is no work for you. In fact some companies will only pay out on a claim if you officially close your business. Again this information should be sought by the seller before recommending a policy.
I cannot work because I am suffering from stress, I have contacted the insurer and they have rejected the claim.
It is not just stress; back problems, chronic illnesses are all often exemptions under which the policy won’t payout. In addition to this if you had any illness in a specified period before you took out the cover these are also excluded from a claim. The advisor, under FSA guideline, should explain the ‘key benefits and exclusions’ of the policy. This should include anything which would inhibit you from making a claim. Many advisors did not ask about pre existing conditions and this could not have advised on the exclusions these would result in.
I have decided I don’t want PPI anymore but my lender says I have already paid for the PPI as part of the loan. I asked for a refund but will not refund any of my premiums.
Single premium PPI, or front loaded PPI, as it is called is in its self a possible issue for mis-selling. The fact that the seller did not advised you that cheaper ‘pay monthly’ policies are available.
On the issue of refunds many companies will either not refund any of the premium or will not refund an amount proportionate to the time gone if you cancel the PPI or pay off the loan early. The regulators guidance is to issue a ‘fair’ refund therefore anything other than a pro-rata refund would be considered unacceptable. However as detailed in the previous paragraph if you can prove that the policy was mis-sold you may be entitled to a full refund.
Can I Claim Without Appointing Oasis Financial Services?
Yes you can. If you do not wish to appoint an agency, such as Oasis Financial Services, to handle your claim you can do all the work yourself.
If you do decide to undertake the work on your own, do not give up, keep the insurer under pressure and if your claim is rejected, take your claim to the FOS or FSCS.
Expect the claim to take a minimum of three months, but maybe up to a year if your claim is rejected.
