It is estimated that over a millionUKborrowers who paid for expensive insurance can expect payouts if they have been mis-sold the cover, a High Court ruled last week.
The banks have been trying to avoid paying out an estimated £4.5 billion, claiming rules imposed by City watchdog, the Financial Services Authority (FSA), were unfairly retrospective. However, the High Court sided with the FSA, paving the way for consumers to be refunded.
Before the banks brought their challenge to the court, cases were flooding through to the banks and the Financial Ombudsman Service. But many banks froze payments leading up to the ruling.
A Which? spokesman says: “The evidence that this financial product has been widely mis-sold is overwhelming. Banks must pay up to the roughly 3 million consumers.”
What is PPI?
PPI is sold to cover loan repayments if the borrower becomes unable to work through unemployment or illness. It has been criticised for being expensive and riddled with exclusions.
The product has often been sold to self-employed workers, who are not eligible for a payout, and the over 65s can’t claim either. Those who take out PPI alongside loans often wrongly believe it is compulsory.
Single-premium PPI policies are even more strongly criticised because the cost of cover is rolled up into the loan, with borrowers paying interest on it. They were banned after an investigation by the Competition Commission found that paying for it monthly means it should be easier to cancel.
PPI is sold with a variety of financial products, though most relate to unsecured personal loans, credit cards, mortgages and secured loans.
Were you mis-sold?
The clearest cases of mis-selling are those where customers were sold the insurance when they had no chance of claiming on it. If you were not employed at the time you took out the insurance, it would be impossible for you to make a valid insurance claim. Given the many exclusions in PPI, something in your medical history could have meant the cover was unsuitable. As PPI cover was often automatically included in repayment quotes, you might not even have known you were paying it.
Sally Bowyer, Managing Director of Brunel Franklin, said: “We are pleased to have been able to help thousands of clients and get the PPI refund they are entitled to; many PPI cases we see illustrate just how careful you need to be when taking out loans and credit agreements, particularly over the phone. It is easy to rush things over the phone and all too easy for the vendor not to make clear the all important detail of the policy. It really does pay to check the small print.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.