PPI (payment protection insurance) is mostly sold alongside credit cards and loans. Its basic purpose is to cover the monthly payments in case policyholder suffers long term illness, loses job, or suffers an accident. Mostly the coverage kick in when policyholder is unable to work for 3 months, and it pays out for a period of maximum 12 months. Although PPI looks great on papers, but detailed statistics show that more than 87 percent people who’ve tried to put their claims under this coverage were not denied.In fact, many people in the UK have paid lot of money for this protection without realizing that they won’t be able to claim on it, and thousands more were talked into buying this cover though they were not interested in it. This is what many groups and campaigners have been persistently trying to put an end to, and in the past two years even FSA (the Financial Services Authority), financial regulator of the UK has been taking corrective steps and has also cracked down on lenders who have been found mis-selling PPI to their borrowers.You have a strong ground for making a claim on mis-sold PPI if lender told you that your loan would be refused if you did not buy a PPI policy. You are fully eligible for making a claim if your answer to the following questions is “Yes”.
* Lender told you that PPI was mandatory
* You were not in stable full time job when you took out the PPI policy
* PPI was sold without your knowledge
* Full details of the policy were not provided to you
* You were not informed that you would buy PPI from other companies as well
* The total cost of the policy was not explained in detail
For making a PPI claim, you should first approach the bank or financial institution who sold you the policy. You will have to wait for about 8 week for their reply. If your complaint is rejected by the lender, you can also contract the Financial Ombudsman Service. Now FSA offers a free guide for all those who are interested in buying PPI, and also helps buyers in finding the best cover from the list depending upon their needs.