Payment Protection Insurance per se, is beneficial, provided they aren’t so hugely over priced and laden with terms and conditions that make even the most legitimate of claims impossible. Not to mention the countless times that they are missold. In fact not many know that a PPI can be bought from a third party insurance company and not necessarily from the company that sells you the mortgage or the credit card. For those, who find it prudent to invest in a PPI; can do so by looking for information from the government’s independent financial advice website. The website offers a product comparison service and is a great resource to find the best value for money. These quotes are offered by first asking for the enquirer’s age, income and health. Although the quotes mentioned may vary, there wouldn’t be a drastic variation.

For those who’ve been sold a PPI, without being disclosed about the terms and conditions or have been sold by overlooking the eligibility criteria for PPI, are liable for compensation on grounds of a missell. There are many grounds that make you eligible for PPI reclaims. For example if you suffer from certain medical ailments or have an income that’s irregular, insubstantial or variable, or receive full sick pay (that includes public sector workers, nurses, doctors, policemen and women, those in the armed forces, government or local authority employees) insurance companies would reject your PPI claims. But when a consumer who falls under the above mentioned categories is sold a PPI, he is liable for compensation. Insurers always often ‘cherry pick’ customers, i.e. when they see the risk of claim is high they raise the premium or refuse claims.

For those eligible for a reclaim may write a detailed letter to bank stating the reasons why the consumer thinks that he has been missold a PPI. Most probably the bank is likely to reject his claim. If the bank were to do so, the consumer may obtain a “letter of deadlock’ from them and proceed for help from the Financial Services Authority. A claims company would also help you claim compensation; however they may charge a settlement fee of around 25-40 %.

The insurance company is liable to return the full PPI premium and also return all payments including interests made towards the policy. The commissions that the lender received from the sale of the policy are to be returned in full. Besides these the statutory interest on the payments is charged at 8% per annum and should be returned.