The true statistics of missold PPI will probably never be recognised. Many people who have paid off loans may never know they had PPI insurance in the first place. Some will never know their PPI insurance wasn’t suitable for their needs and any claims they made have been destined to failure, a classic case of being missold PPI.
This is article talks about the games lenders play with PPI, and the different ways you could have been missold PPI by them. Have you been caught out?
Sold a store card in a shop
Sometimes the offer of getting 10% off your shoPPIng is too tempting to pass by. Before you know it, you’ve signed up for a store card that charges you a fee for PPI every month, regardless of whether you use it or not. The shop assistant forgot to mention it – possibly along with some other key pieces of financial information – because it was so busy in the shop that day. You have been missold PPI by a sales assistant with the minimum of financial training.
The loan is longer than the policy
Many long-term loans outlive the PPI policies on them, which is typically around five years, so if you are concerned you need PPI for the duration of a longer loan you will need to shop around for a policy for the whole of the term. Your lender should explain this limitation. If they haven’t or they have assured you the policy will run for the duration of the loan and it doesn’t, you have been missold PPI.
Joint policy held in one person’s name
This has caught many people out at times when they are facing real financial hardship. If a joint policy is held in one person’s name, it is usually only that person that can claim. If the lender tells you that both of you will be covered for the full benefits even though there is only one name on the policy plus the policy documentation does not support the lender’s claim, you have been missold PPI.
The policy does not cover students, unemployed, part-time, or retired people
The worst cases of missold PPI seen are those people who were blatantly unsuitable in the first place and would never be able to claim against the insurance if needed.
People who were unemployed at the time the PPI was taken out will not be able to claim, neither will someone who is a student. Often even working part-time would be enough to automatically exclude you from claiming. The vast majority of PPI policies only pay out when you have been made unemployed from a full-time position. If you have been sold a policy and you are a student, unemployed or work part-time, you may have been missold PPI.
Likewise, if you were retired when you took out the policy you will not be able to claim and, as most policies have an upper age limit, if you were older than this when you took out the PPI it will be impossible for you to make a valid claim. You have been missold PPI.
Does not cover the self-employed or has business limitation clauses
The definition of self-employed by some insurance providers is very unclear and is frequently quoted incorrectly leading to missold PPI. Some policies may only cover you if you run a limited company and will only pay out if you involuntarily liquidate that company (you are insolvent and your creditors force you to close down). If you are a sole trader or you decide to shut your business down voluntarily, you may find you cannot claim. Always check the small print. If it disagrees with what you were told, chances are you have been missold PPI.
No enquiry about existing medical conditions
If you had an existing medical condition when you took out the insurance that could keep you from working, you should have been told that the insurance was unlikely to be suitable for you. This even includes conditions like stress or a bad back. If you were not told this, if no enquiries were made, you have been missold PPI.
No discussion about alternative cover you may already have
Some people are already covered for income protection through an alternate insurance policy or an employer income illness and redundancy package. A lender should ask about this; you would be paying two insurance policies and could only ever claim on one of them making the other a waste of time. If you already had alternative cover that would insure your repayments and you were never asked about it, you could have been missold PPI.