FAQs
Payment Protection Insurance (PPI) FAQs
What types of PPI are there?
In what circumstances can I make a claim?
In what circumstances would my compensation claim fail automatically?
What is the procedure for claiming back these charges?
Will this affect my loan payments?
When I took out my loan I was told I had to take out PPI, is this true?
On my credit cards, loan and store cards statements I have a monthly PPI charge added. I don't recall asking for or agreeing to this?
Can I make a claim myself?
How much will it cost me?
Any other questions?
Q. What types of PPI are there?
A. PPI can be come in many forms:
- Accident, Sickness & Unemployment Protection
- Redundancy Protection
- Loan Protection
- Mortgage Payment cover
Essentially they are all supposed to act in a similar way – when a certain circumstance occurs (redundancy, long term illness etc) the policy will cover your monthly repayments on whatever loan the policy covers
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Q. In what circumstances can I make a claim?
A. With any loan taken out, whether it be a secured loan, unsecured loan, mortgage, car finance etc; PPI should be a completely optional agreement that you can choose to cover your repayments.
Mis-selling may have happened if:
- You were told that you had to take out the policy to qualify for the loan
- The policy was unsuitable for your circumstances e.g. redundancy protection for a self employed person
- The nature of the PPI policy was not fully explained to you
- The full cost of the PPI policy was not made clear to you
Q. In what circumstances would my compensation claim fail automatically?
A. FA claim for mis-selling of a PPI policy would certainly fail if:
- you agreed to the terms and fully understood what you were taking out,
- you took out the PPI voluntarily (e.g applying for a loan online.) This is a circumstance known as “Execution Only” as no advice was given in the selling of the policy.
Q. What is the procedure for claiming back these charges?
A. Firstly we send a form of authority and a complaint letter stating the terms of the mis-selling to the loan arrangers (the company that sold you the loan). From there the arrangers will send out a PPIQ (payment protection insurance questionnaire) which you are required to fill in and sign in relation to the sale of the policy.
After then submitting this back to the arrangers they will make a decision based on the fact and figures available to them. If they make an offer we forward this to you for consideration, but if the reject the claim you have the opportunity to refer the matter to the financial ombudsman service for review.
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Q. Will this affect my loan payments?
A. No - the payment protection insurance is a completely different agreement to your loan.
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Q. When I took out my loan I was told I had to take out PPI, is this true?
PPI is in most instances optional, even though it is generally sold as part of a loan or finance agreement. PPI is extremely profitable to companies and large incentives are offered to staff to 'sell' these policies. If you have any doubts as to whether your PPI is optional we are happy to take a look for you.
Very occasionally, particularly where the loan amount is large, the company may insist on some form of protection to cover payments should you be unable to work. However, this does not mean you cannot find your own payment protection insurance – you don't have to use the same company and you may well get it cheaper elsewhere.
Although companies that do make it compulsory to take out their PPI are not technically breaching any particular rules, they may be contravening of the Financial Service Authority (FSA) in 'treating customers fairly' or the 'acting in a fair and reasonable manner'. The UK banking code states that banks should not make customers take out their policies.
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Q. On my credit cards, loan and store cards statements I have a monthly PPI charge added. I don't recall asking for or agreeing to this?
Quite often, when you apply for a loan, finance or other credit facility the option to take out PPI is just a tick box. The common question asked by the salesperson is 'do you want to protect your repayments in the event you are unable to work'.
If you answer 'yes' the box will be ticked and they move on. The salesperson should actually explain what PPI is, what it covers, what it will cost and if your circumstances mean you are eligible for cover. This is not always the case.
Another familiar method some companies use is to automatically include PPI within the agreement. In this instance it is left to the client to read the small print and opt out. This normally falls outside the Financial Service Authority (FSA) 'treating customers fairly' or the 'acting in a fair and reasonable manner' regulations.
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Q. Can I make a claim myself?
Yes, it is possible to initiate a claim yourself. This is rather like not appointing a solicitor when you buy a house and doing the conveyance and leg work yourself – it can be done but it is a lot of hassle!
Appointing Solar Accountants to manage the claim professionally on your behalf takes away all the hassle of dealing with financial institutions who love to try and confuse people with complicated jargon.
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Q. How much will it cost me?
A. We undertake to do all the work to present and chase-up your compensation claim free of charge. You only pay a fee when we have successfully secured compensation for you – and then only 25% +VAT (28.75%) of the claim settlement amount.
Charges may be payable in some exceptional circumstances, which are set out in clauses 4.1, 4.2, 4.3 and 6.4 of Solar’s Terms and Conditions, which are available upon request.
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Q. Any other questions?
If you have a question which we have not answered here,
please call or email us for a personal response.
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