PPI - have you been caught out?

The Financial Services Authority last week fined internet lender Loans.co.uk £455,000 for mis-selling payment protection insurance (PPI).

The cover, sold alongside mortgages, loans and credit cards, has also been branded a "poor deal" by the Office of Fair Trading, which has referred the industry to the Competition Commission.

One of the main problems is that PPI policy small print is generally riddled with exclusions, which are often not properly explained to those buying it.

The self-employed, for example, cannot claim on PPI because it is deigned for those in employment to cover their debts repayments should they become unable to work. Those off work due to back pain or stress will also routinely have their claims refused.

The Sunday Times wants to expose the companies that are offering the worst deal on PPI, so let us know if you've had a bad experience.

Comments

[a. panessar]

virgin credit card also included this ppi policy and i note from the statements that the cost of policy is higher than the interest they charge per month. i asked them to remove same - have not heard reply from them that removal had been effected.
what can be done if they refuse the remove the policy??

[William P Ward]

Hi

It was not three weeks since that family friends in Nottingham were pressured I would say – into taking PPI with a £10k loan from Northern Rock.

When they tried to cancel the PPI within the time-limit guaranteed they were told that the whole loan would have to be rearranged and it was unlikely that the same interest rate would prevail.

I dictated a letter, headed 'Letter Before Action', to write and send to Northern Rock by registered delivery and they were delighted to report – within just three days of posting – that Northern Rock had reconsidered AND the loan was at a lower rate!

For my sins, many years ago, for a very short time I worked for a large secondary finance firm in Leicester where the Holy Grail was to sell a mortgage to a right-to-buy complete with DUAL PPI. The value in commission terms would pay for a fortnight in Spain.

Keep up the exposure of the money-lenders sharp practice

[Giles Craven]

My wife and I owned a flat 50:50.
On deciding to sell, my wife transferred her share to me. This was for CGT planning purposes and was undertaken by our solicitor.
Buyer arrangers loan with Bank of Scotland.
At 11th hour, lender demands 'title protection insurance for a once off £500 premium.
To close the deal, we pay the premium for the buyer; we have seen no docs, nothing about the cover or what deficiencies have been found in the title.
Never learn what the problem is except catching the buyer at a weak moment. He has small children and is due to arrive in this country with family.
We will not do business with the Bank of Scotland in the future.
Sounds like misselling to me!

[Jan]

We took out a loan with Moneyback Bank (Alliance and Leicester) towards buying a car. My husband got the distinct impression that no ppi meant no loan. He has a secure well paid job and no-way did we need ppi. We tried to cancel the ppi but they said it was "bought" at the start and the whole loan would have to be rearranged. This resulted in hardly any change in payment so we gave up at that point. The rate we are really paying was easily available elsewhere.

[Karin Munro]

I took out PPI for a (smallish) Nationwide mortgage and it was really useful when I was made redundant not long after - no problems whatsoever.

[Richard Morford]

I had a PPI policy on my mortgage and tried to claim when I was made redundant. I was told it would not pay out for the first three months which was totally useless. I got off my back side and found another job within 4 weeks and so never put a claim in. It was a total waste of money so I have now stopped it and, with the invaluable help of a claims company called Solar Accountants, I've managed to make a compensation claim and had all my premiums repaid.

[Alan Connor]

I had PPI with my mortgage through Nationwide. I developed a condition that meant I could no longer run my business and had to re train for a new trade.

This took about two years before I got some part time work in my new industry.

Nationwide and the company who underwrote the policy paid my mortgage every month without fail.

The cost of their payments more than covered the cost of the policy for the whole term of the mortgage never mind just the period of sick/unemployment.

I have since moved my mortgage and have new PPI I wouldn't be without it.

Mind you the Nationwide didn't pay out on the mis selling of endowment policies. You win some you lose some.

[ea williams]

Recently we applied for a personal loan for £10000 from lloydstsb and quite a lot of pressure was put on us to take out PPI despite my husband being comfortably retired. I had to be very assertive about not wanting it as it would have increased the payments by about £40 per month and we would not have had a reason to claim or probably been eligible anyway.

[David]

Ever done a credit card balance transfer at 0%? You can bet that you will be offered PPI. FOr the self employed the unemployment related part of the premium is really a waste of money as you have to have informed the Revenue that you have ceased trading (fair enough) but that you are also unable to meet your obligations i.e. declaring your self bankrupt! As a matter of policy I NEVER take this on loan agreements.

[Richard Green]

I took out PPI several years ago with Hamilton Insurance or it's agent, Payment Shield.
On the face of it the premium and conditions seemed very good value.
8/9 months after taking this out, I was unfortunately dismissed from my job on grounds of unsuitability and poor performance.
I had passed the 6 month qualifying period of the insurance and was entitled to claim.
However, because my employer mentioned 'poor performance' in my severance, the insurer used this to avoid paying out.
I wrote several letters appealing against the decision, including one to the financial ombudsman, but because my ex-employer's word was taken absolute, my argument of no proof of my poor performance was outweighed.
I felt that my ex-employer had let me down as they never helped me in achieving my very ambiguous job description and, then because things were not working out, did the dirty on me.
Equally, as most of us are aware, insurers and their actuaries will do the best to avoid payment in such a competitive environment.
I had evidence e.g. no targets or allocated accounts even though a sales role, to prove that the reasons for my dismissal were completely subjective, not objective! Nonetheless, my ex-employer's word counted for more!
Lessons to be learnt:
Obtain a specific job description of how you and your employer are going to achieve your role requirements and hold them to it.
Make notes/gain evidence of anything that is contrary, inconsistent or breaches employment law/guidelines.
Request them not to put poor performance in a severance letter as a reason for dismissal. Let them be ambiguous!
p.s. It was only after I left that I received my terms and conditions of employment! At least there was some consistency!