If you have any form of mortgage, credit card or loan and reside within the UK, it is very important that you check whether or not you have PPI, also known as Payment Protection Insurance. You may have never heard of it, but if you have debts then you may well be paying hundreds of pounds for it. If you signed on for a loan that was “protected” then what that often means is that you are not only repaying your loan, but an added insurance, known as PPI, to the banks. PPI purports to insure you in the event that you suffer an accident or injury that prevents you from repaying your debt, it promises to repay monthly payments of the debt, under very strict circumstances, and in the event that you cannot repay it.

However, the problem is that many people have been mis sold payment protection insurance. Some people were told that it was compulsory in order for them to be granted the loan, and others were simply not told the actual fees. Some people might say that PPI is useful to have, but there are a few problems with this. Firstly, PPI claims have some of the lowest payout rates for any type of insurance; the companies very rarely pay when people thought they would. Secondly, many policies only cover you for a period of twelve months, leaving you high and dry when this coverage runs out.

As a result of all of this, many people have claimed that their payment protection insurance was sold to them under false pretenses and have attempted to claim the charges back, with great success in many cases. The FSA or Financial Services Authority in the UK has been fining many high street companies under the premise that they have mis sold payment protection insurance and so have set a precedent for claims to be refunded. The risk to the companies and banks is that, should they choose not to refund someone’s PPI, they stand the risk of being sued. Should that lawsuit succeed a precedent would be set which may permit a great many people to demand their money back.

Therefore some banks and lenders are currently quietly paying off people who claim that their PPI policy was sold to them unfairly. You can talk to your bank or lender yourself or contact a claims company who will do the same thing for you for a fee. Try to have all of your information ready, and remember what the loan broker told you at the point that you purchased the service – did the make any promises that they shouldn’t have, and did they make the costs clear? If not, then claiming the money back may be a possibility.