Thousands of people have taken out Payment Protection Insurance (PPI) on their credit cards because they thought their application was more likely to be accepted if they did.
Approximately 9.8 million people have credit cards with PPI attached, according to a survey by Which? consumer group. Of these about 13 per cent (or 1.3 million) thought that buying the PPI was a condition of the sale or that it would boost their chances of receiving the credit card.
Were You Mis Sold PPI?
Another 28 per cent of these people said that their credit card provider had told them that taking PPI was a good idea even though many policies have a wide range of exclusion clauses and are difficult to claim upon.
PPI is sold alongside credit cards, loans, finance agreements and mortgages to cover repayments if people are off work because of illness or unemployment.
The Competition Commission has issued a report on the PPI market which states that customers are being overcharged for the cover by approximately £1.4 billion a year because there is a lack of competition in the market. According to the commission’s report advisers are very well rewarded for selling PPI, taking up to 80 per cent of the first year’s premiums as commission.
Doug Taylor at Which? said:
“ Credit card PPI is a modern day snake oil – it’s a useless product, expensive and poorly designed. As the credit crunch continues to take hold, people want to be protected and have peace of mind, but credit card PPI, like a house of cards, won’t give you the support you need.
In this time of economic uncertainty, people are effectively throwing away £970 million each year, when they should be encouraged to seek independent financial advice about protecting their finances as a whole.”
credit card ppi claims
Have a look at the following questions, if you can answer yes to any of them you may have been mis sold PPI and can then make a credit card ppi claim
* Did the adviser make it clear that the insurance was optional (if this was the case)?
* Did the adviser make it clear that you would have to pay for the insurance up front in a single payment?
* Did the adviser make it clear that if you had to pay for the insurance as a single premium, the insurance cost would be added to the loan and you would be paying interest on it?
* Did the adviser make it clear that if your PPI policy expires before your loan or finance agreement does, you’ll be paying interest on insurance that is no longer in force.
* Did the adviser tell you about the exclusions under the policy? For example, the exclusion that states you won’t be covered for any pre-existing medical condition, you might not be covered if you are over 65 or if you are self employed or on a fixed term contract?