13:46 16 July 2013
Payment Protection Plan or PPI has been one of the hottest topics in the world of banking and finance for the last couple of years. This is because of the scandal that involved selling PPI to people without knowing it or to people who were not qualified for it.
Because of this, borrowers who were mis-sold this product are now making claims. If you’re one of them, find answers to frequently asked questions to get the answers that you need to know.
Q: What is PPI?
A: PPI is designed to cover monthly payments up to 12 months should the borrower get sick or suddenly becomes unemployed. However, some banks and lending institutions mis-sold this product to a lot of people. Some borrowers were not informed that they’d be paying for it while others were sold it without being qualified for it.
Q: When did PPI mis-selling start?
A: Experts believe that mis-selling has started a long time although they cannot provide specific dates. Claims are generally on policies from the 1990s. Financial regulators fined PPI companies in 2006.
Q: How much refund can I get?
A: Generally, the amount of PPI is about 15per cent to 30per cent of your balance. For some people, this could mean hundreds to thousand of pounds.
Q: What name should I look for to spot PPI on the paperwork?
A: Look for “insurance fee” or product that will cover your payments in case you lost your job or you get injured. Other lenders call it protection plan, payment cover, ASU, retail payment protection, or loan care.
Q: Will reclaiming my PPI have a negative effect on my credit rating?
A: The answer to this question is no. Also, for your peace of mind, know that it won’t go on your credit file either.
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