An Overview Of Payment Protection Insurance
Payment Protection Insurance (PPI) is an insurance system that borrowers can avail if they feel that at some stage, they may face issues in periodic payments for loans or debts.Events such as accident, unexpected illness, job loss, or similar other incidents are responsible for such a scenario.The insurance scheme carries on the repayment for a fixed period of time under such circumstances.Such form of insurance is generally involved with major financial transactions such as loans, credit cards, etc.However, some cases have come to light where PPI is offered and sold to the customer in spite of no requirement.Such cases are known as miss-sold PPI.
Certain transactions by private dealers and financial organizations have been highlighted by the media, resulting in mis sold PPI cases coming to notice.The applicant is convinced by certain lenders that he or she has to compulsorily opt for PPI coverage for the loan to receive approval.However, this is not entirely true.PPI coverage for loans is not a compulsion and many schemes are available without PPI as well.Furthermore, it is not mandatory to get the PPI coverage from the lender himself.It is best to obtain PPI coverage from an independent broker to avoid such forms of miss-sold PPI.
As an example of miss-sold PPI, consider an offer that you get in a mall that offers 10% discount on usage of store card.In our haste, we fail to read through the fine print that may indicate PPI charges payable on the card irrespective of its usage.
Payment protection insurance do provide significant peace of mind to the borrower, if you leave out miss-sold PPI.Correctly chosen PPI schemes ensure that the applicant does not have to worry for loan payments in times of need. This further ensures that the applicant’s credit rating is not damaged and he or she does not face any legal complications due to non-compliance of loan repayments.However, check out all benefits that you can avail from PPI coverage before fixing up any scheme.It has also been observed that in the end, most borrowers do tend to purchase PPI coverage to safeguard their debts.
It is actually possible to reclaim PPI amount if an applicant has been a victim of miss-sold PPI.Try to claim the refund directly from the lender or bank authority that you have dealt with as a first step.Contacting the banking ombudsman is the next step in case you meet with a refusal.Consumer forums and state regulated unions responsible for borrower rights are a final frontier for such applicants.